Ford’s world headquarters in Dearborn, Mich. Photo Credit: Ford Motor Company.
As any Ford investor would likely tell you, the biggest thing for Ford Motor Company (NYSE:F) to fix right now is its operations in Europe. Last year the company lost $1.7 billion in the region; it had planned to lose $2 billion this year, until management revised it down to $1.8 billion last quarter. Consider that management plans to turn a profit for the full year in 2015 – the equivalent of a magic trick that could instantly produce nearly $2 billion to Ford Motor Company (NYSE:F)’s net income, a big deal considering that Ford Motor Company (NYSE:F) reported $5.6 billion in net income last year. Ford just released its August results in Europe, and there are some very positive developments to consider: additional model launches, rental sales are down, and increased market share.
Market share improves
Ford Motor Company (NYSE:F)’s market share in Europe’s traditional 19 markets grew by 50 basis points to 7%, marking the fifth consecutive month of total market share gain. The reason behind that growth was a sales increase of 2.3% to 53,400 vehicles for August, while the overall market declined 5.7%.
Another positive sign for Ford Motor Company (NYSE:F) is that its small cars are selling well in the region. Ford’s passenger car retail market share in the five largest Western European markets, (U.K., Germany, France, Italy, and Spain) was 6.5% last month, up 1.1 percentage points.
According to Ford Motor Company (NYSE:F), it was the No. 2 brand in Europe in terms of sales in August which further strengthened its year-to-date No. 2 best-selling position. The company isn’t resting, though; there’s still a lot of ground to gain before profitability is reached in the region.
Additional models will help
“Ford’s sales volume and share momentum is continuing in Europe thanks to our customers’ response to our ever-strengthening product line-up,” said Stephen Odell, president, Ford of Europe, in a press release. “Now we are going even further. … Today, we are confirming that we are accelerating our new vehicle introductions and now expect to introduce at least 25 new vehicles in Europe in the five year period from September 2012,”
Three of those models are still to be released by the end of this year, the EcoSport, Transit Connect, and Tourneo Connect.
More retail, less rental
When investors hear the words “fleet sales”, most consider it a hideous term. That isn’t always the case, as many fleet sales can be very profitable for automakers. What you don’t want to see is a surge in rental sales, and Ford has avoided that.