Ford Selling Hertz for $5.6 Billion [Archive]

AWD*V70XC

09-13-2005, 03:56 PM

FRANKFURT, Germany (AP) - General Motors Corp. and Ford Motor Co. introduced a slew of new vehicles Tuesday intended to boost sluggish sales in Europe, saying good design and cost-cutting are key to combatting increased competition from Asia.

"At the end of the day, the business is going to be on the strength of the product," Lewis Booth, chairman and chief executive of Ford Europe, said at the 61st International Auto Show.

Booth and GM Chairman and CEO Rick Wagoner lamented conditions in Europe. High unemployment, a strong euro and rising oil prices have slowed auto sales.

In the second quarter, Ford Europe's pretax profit narrowed to $66 million from $211 million a year ago. GM reported a loss of $318 million in the region, including a $126 million charge for restructuring.

GM announced plans last year to cut as many as 10,000 jobs at its Adam Opel AG unit in Germany, and Wagoner said the company is about halfway through that plan.

"Overall economic growth in Europe hasn't been robust and the car market hasn't been robust," Wagoner said.

Wagoner said the company's biggest growth opportunities in the coming years likely will be in Eastern Europe, where it will face considerable pressure to produce low-cost products.

Booth said Ford is looking at buying more parts in Central and Eastern Europe in order to cut costs. "This is a continual squeeze," he said.

Ford and GM held about 20 percent of the market in Western Europe in 2004, about the same percentage as four years ago, according to the European Automobile Manufacturers Association.

But they are facing increasing pressure from Japanese and South Korean makers, whose market share in the region rose from around 13 percent in 2001 to more than 16 percent last year.

Michael Robinet, vice president of global vehicle forecasting for CSM Worldwide, said it is the same kind of competition GM and Ford saw in the United States 10 years ago. The companies will have to lower their European production and supply costs to keep up in an increasingly competitive market, he said.

"Ford and GM are both putting up a very brave fight in Europe," Robinet said.

GM revealed the Cadillac BLS, its latest attempt to insert Cadillac into the European market. The mid-size sedan will compete with the Audi A4 and BMW 3-Series and will go on sale next year.

The company also unveiled a crossover concept called the Opel Antara GTC, with frameless windows and a coupe-like silhouette. The company said the concept is a signal of striking designs to come.

Ford showed off the newest generation of its Galaxy utility vehicle, which is designed for the European market and will go on sale next year. The company said its more car-like design and new features -- including a more spacious interior -- will help it compete in a crowded field. It also showed off its Iosis concept, an assertive coupe that Ford said signals a new era of design.

Two of Ford's premium divisions, Jaguar and Volvo, also introduced models intended to help continue the luxury brands' recovery. Ford's Premier Automotive Group, which also includes Land Rover and Aston Martin, lost $17 million in the second quarter, compared to a loss of $347 million for the same period a year ago.

Jaguar introduced the muscular XK8, the company's first coupe since 1996, which also will go on sale early next year. Volvo debuted the C70 convertible coupe, which has Volvo's first folding hardtop.

Volvo hopes to sell 16,000 C70s annually -- double the peak of the first generation C70 -- and expects half those to be U.S. sales. The car goes on sale in the first half of 2006.

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I think it is too little - to late :rolleyes: , I also think Volvo has entered a 'business' Cul de Sac, and we all know that there is no way out of a Cul de Sac. Passing thoughts.....So long Volvo, you should have listened to us a long time ago. :mad: