Ford announced today that they will cut 4,000 automotive jobs across its European business, with almost three in four (2,700) coming from Germany.
The cuts are expected to be implemented by the end of 2027.
The main reasons given for the cuts:
▪️ Slow uptake of EVs, which their product portfolio has increasingly been skewing to, with the Cologne Fiesta facility having recently made way for the all-electric Explorer/Capris BEVs.
▪️ A stronger competitive environment in a weak market environment. Chinese OEMs were highlighted, which, according to Ford, compete unfairly with PRC government-backed subsidies, making the European playing field uneven.
▪️ Asked if EU tariffs placed on Chinese BEV models since November will help: the US company said, in the short-term perhaps, but once localisation begins (BYD begin local Hungarian production from 2025, and navigating tariffs) the market environment will become tough once again with those Chinese OEMs still competing unfairly and avoiding tariffs while still being subsidised. Chinese OEMs have been aggressive in targeting mass-market brands and command 10% of the West European BEV new car market, according to our own data during the opening 9-months of 2024.
These calls echo Volkswagen's position, which they presented to the German government last week, highlighting that this is a mass-market industry-wide issue across organisations (see below).
The problem for Volkswagen and Ford, which are likely both looking for stability and answers from the German government, is that the government is essentially now lying dormant following the effective exit of the FDP from the current coalition government, triggering new elections scheduled for the end of February.
French mass-market OEMs still have the advantage, as their government is still supplying purchase subsidies that are focused on domestic products and exclude Chinese models.
One bright spot for Ford is the continued success of the Ford Pro commercial vehicle part of the business, which continues to go from strength to strength. Chinese OEMs have yet to penetrate this part of the market, however.
West European passenger car market share 9-months 2024:
Ford: 3.7%
MG (SAIC): 1.9%
BYD: 0.3%
Chinese brands combined: 3.2%
Source: Schmidt Automotive Research.
All of our reports, which feature exclusively researched data, can be purchased here. ◼︎︎
*Western Europe 18 Markets: EU Member States prior to the 2004 enlargement plus EFTA markets Norway, Switzerland, Iceland, plus UK
Comments