Talking to reporters Monday, Ford's (NYSE:F) Chief Financial Officer Lewis Booth said he would like to see competitors in Europe drop the incentive rates they're using to drive sales, saying their actions are excessive.
Booth said, "We'd like to see a more rational marketplace. People are incentivizing cars so heavily it's not a long-term rational strategy. We'd like to see the European market stabilize."
He said Ford is challeged in the market because the company won't "chase market share" in Europe, which could ultimately result in losing share to competitors, although obviously the margins and earnings of competitors will come under pressure as a result, although revenue will surge.
In 2010, market share in primary marekts of Europe plunged by 11 percent from 2009, suggesting the strategy of their opponents is working, which seems to make Booth very nervous.
Calling for opponents to stop doing something successful is nonsensical, as if they want to sacrifice margins and earnings in the short term to grow share, that's their business, and as mentioned, is working as they had hoped for.
Ford will either be forced to respond or offer similar incentives as its opponents.
If not, they'll continue to lose European market share, which over the long term, could dramatically impact the company if people continue to buy the vehicles of Ford's competitors after the incentives are ended.
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