Ford sees drop in 2011 European auto sales

A Ford Motor Co (F.N) manufacturing executive on Friday said he expects 2011 auto sales in Europe to fall to 14 million to 15 million units from annualized rates of 15 million to 16 million in recent months.

John Fleming, Ford executive vice president for global manufacturing and labor affairs, said sales in recent months have been artificially boosted by discounts to consumers that obscure a true reading on new-vehicle demand.

Government-sponsored consumer sales incentives -- called scrappage programs in Europe and similar to the U.S. "cash-for-clunkers" program of the summer of 2009 -- have largely expired. Scrappage programs in Germany, the largest European market, expired more than a year ago.

"When you look at the numbers, you would say that sales have held up better (than had been expected)," Fleming said. "When you look at profitability, and see that a lot of the European market is being driven by end-of-the-month and end-of-the-quarter business, which is a push which is heavily discounted, it's difficult to know exactly where a normal running market would be."

Fleming spoke from an investors conference in London on Friday that was webcast.

France is the last major European market where scrappage incentives remain, and that program ends at the new year.