Vehicle sales are likely to fall year-on-year in Britain in 2008 and 2009 unless something is done to improve the availability of consumer credit, the chairman of Ford UK said.
Roelant de Waard told Reuters he expected overall sales to fall 8 percent in 2008 compared with the previous year, and while he did not see demand falling below current levels that would still lead to another year-on-year decline in 2009.
"We assume demand will stay where it presently is unless something is done. The affordability and availability of consumer credit has to improve," he said in an interview, adding that taking out a loan was the most common way to buy a car.
He declined to say exactly what should be done to ease the crisis, such as lowering interest rates. "Confidence is what is needed most." De Waard added that the global credit crisis was the biggest factor in the downturn of the vehicle sales market, ahead of high fuel costs.
"We believe we have addressed the issue of fuel prices with new technology, making cars more fuel efficient," he added, speaking at the UK launch of the new Ford Fiesta.
De Waard said Ford had introduced lending products for both consumer and business customers to help offset the worsening of terms from banks. While he expects to see some impact on Ford's own sales from falling demand the group hoped to keep UK market share at around 16 percent. The company sold 450,000 cars and vans in the United Kingdom last year.
The Society of Motor Manufacturers and Traders (SMMT) said earlier this month that British new car sales fell 18.6 percent in August to just over 63,000 - far worse than the year-to-date figure which was down just 3.8 percent.
Ford UK on October 01 moved staff at its transit van plant in Southampton to a four-day week to cut production, although De Waard said there were no plans to close the factory.
"It (new production levels) reflects the present level of demand. Commercial vehicle sales have followed passenger car sales very closely," he said. The Southampton factory is the only Ford plant in the United Kingdom to manufacture vehicles, but others including the 4,500-employee site in Dagenham in Essex make parts such as engines.