Ford Expects Rise In Global Auto Production

NEW YORK (AP) -- Ford expects global auto production to increase 5 to 10 percent this year over 2009 levels, a modest gain that reflects the still-weak economy.

"The business environment is challenging but we do expect global growth to continue going forward," Ford Americas President Mark Fields said Thursday at the Credit Suisse Automotive and Transportation Conference in New York.

Automakers produced around 60 million vehicles in 2009, down 13 percent from the previous year, according to Ward's AutoInfoBank. World vehicle production peaked at 72 million in 2007.

Fields said consumer spending remains below trend in the U.S. and Europe due to weak labor markets and uncertainty about the economic recovery. Asian markets are moderating, he said, but growth in that region remains strong. In China, auto sales rose 18 percent to 1.02 million in August.

One downside to an improved market with more economic activity is rising costs for commodities used by car makers like steel, copper and platinum. Fields said Ford Motor Co. expects to see $1 billion in commodity cost increases in 2010.

The automaker also said structural costs will rise by $1 billion in 2010 due to increased marketing for the new Ford Focus and Ford Explorer as well as product development. Fields said Ford has cut out $10 billion in structural costs since the end of 2005 through plant closures, employee buyouts and layoffs and other actions.

Ford shares fell 8 cents to $11.72 in afternoon trading.

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