Ford yesterday became the first US car company to call the end of the automotive slump that has brought down its two fellow Detroit giants.
After a rough period that saw Ford sales plummet 40 per cent in February to their lowest level for more than a quarter of a century, the company expects sales for June to decline by less than 20 per cent year on year. George Pipas, the chief sales analyst, said both the car market and the US economy may be on the up. "The worst is behind us," he said. "We may see economic growth in the second half and a higher level of auto sales."
There is little sign of a recovery in the UK market. Registrations were down by more than 24 per cent in May, despite the introduction of a scrappage incentive designed to boost sales. Car sales across the world disintegrated when both consumer confidence and the availability of credit dried up in the wake of the collapse of Lehman Brothers last autumn.
The big three Detroit car makers – Ford, Chrysler and GM – have been hit even harder than most. With last year's unprecedented oil price rises already pushing consumers away from the traditional gas-guzzling SUV ranges to more economical Japanese alternatives, the recession then exposed major structural flaws. Ford is the only one that has managed its way through the problems. Chrysler needed $4bn (£2.4bn) in loans from the US government, and was then taken over by Fiat. GM became the biggest corporate failure in history, offloading its European division just days before filing for Chapter 11 bankruptcy protection with debts of $173bn. The government is expected to take a 60 per cent stake in the slimmed-down group, putting up another $30bn on top of the $20bn in emergency loans since last year.
Meanwhile, discussions about the fate of GM Europe, which includes Vauxhall in the UK, are ongoing. The preferred bidder is Magna, a Canadian car parts manufacturer, in a consortium bankrolled by Sberbank, a Russian bank.Reuse content