Ford Motor Company forecasts a $2 billion loss in Europe this year, as the recession in the region may cause even lower auto sales than last year.
Ford said on Tuesday that 2013 loss would be worse than the $1.75 billion deficit in 2012 as its sales outlook is deteriorating in Europe. The U.S. automaker is closing plants and cutting costs.
However, in North America the company expects to earn more money this year and expects 10 percent margins. North America was Ford’s main source of strength last year. Still, the company’s overall outlook is weaker than some analysts predicted, with Ford shares down 5.7 percent to $12.99, the sharpest decline since August 2011.
Ford expects to break even this year in South America and Asia. Overall, Ford targets a total operating profit this year similar to 2012 results, as market share gains in the U.S. offset Europe, where Ford expects to sell between 13 million and 13.5 million vehicles this year.
According to Ford, industry sales last year in the 19 markets it tracks in Europe were the lowest since 1995. “We’re likely to see, in the euro zone, a recession for the full year. Clearly we still have some difficult times in front of us. But we do think it will probably bottom this year,” Chief Financial Officer Bob Shanks was quoted as saying by Reuters.