Ford Motor Edges Closer to Profitability in Europe

Ford Europe sales rises 11% in 2015; company is positive about 2016 outlook

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Jan 27, 2016
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Ford Motor (F, Financial) has been suffering losses in the European market over the past few years, but the automaker continued its efforts towards making a steady progress to profitability. The company’s steady effort can be seen from the latest sales figure in the European market. Not only did Ford Motor record its best-ever total vehicle and passenger car sales in Europe since 2011, but also posted a record commercial vehicle sales since 2007 despite the struggling European economy. In addition, the company has also gained significant market share. Here’s a brief look at the Blue Oval’s performance in Europe in 2015.

Key stats

The second-largest U.S. automaker sold 1.5 million vehicles across all 50 European markets, which is an improvement of 10% as compared with 2014. As far as the 20 traditional European markets are concerned, Ford’s sales spiked 11% to 1.3 million vehicles.

Moreover, Ford’s market share grew to 8%, an increase of 0.1% from the previous year. A combination of some of the predominant factors like growing consumer confidence, rising demand and a slew of new and refreshed products helped the company to make a strong impact in its 20 traditional European markets. The automaker also became the top commercial vehicle seller in Europe for the first time in 18 years on the back of strong sales of Transit vans and Ranger pickup, which were up 23%.

Ford’s Titanium trim of passenger cars also sold well, up 7% in 2015 compared with 2014. Furthermore, the most expensive version of the pickup truck, the Ranger, accounted for 34% of the company’s 2015 sales in Europe.

Ford remains bullish on Europe

In December, the company’s fortune remained dazzling as sales surged 22% year-over-year to 102,400 vehicles in the 20 traditional European markets. The company’s commercial vehicle market share rose to 12.6% in Euro 20. In all 50 European markets, sales grew 13.2% to 130,400 units for the month.

For Ford, 2015 was a rewarding year in Europe, particularly after years of difficult economic environment. The company is optimistic about its prospects in 2016 and is geared up to capitalize on the recovery. Jim Farley, Chairman and CEO of Ford of Europe said “In 2015, we showed our customers a more emotional, vibrant and upmarket vision of Ford with cars like the new Mustang and Mondeo Vignale, and we’re poised for an exciting 2016 with vehicles such as the all-new Edge SUV and RS Focus performance car.”

Since Ford is gradually gaining momentum in Europe, the company must keep a track on categories of vehicles that are performing well in the region. As per the scenario, smaller vehicles sold well in Europe, which makes Ford Fiesta a good pick. Fiesta was indeed a big seller in Europe selling more than 311,000 vehicles. This makes it a strong contender for the number one spot in the small car segment in Europe, and the second bestselling car for four straight years.

While the small cars were at its peak in Europe, the SUV segment also did a fabulous job posting an attractive 31% sales gain. This is attributable to Kuga’s sales that jumped 19% to 102,800 units. As of now, things seem to be going in a favourable direction for the company. Ford is anticipating strong SUV sales in Europe this year and it might be well beyond the 200,000 units mark for the first time.

Last word

Roelant de Waard, vice president of marketing, sales and service for Ford Europe, said that the industry delivered around 16 million vehicles in 2015. He predicts the momentum to stay in 2016 with the volume increasing to 16.5 million vehicles. With a strong SUV lineup, Ford expects to see impressive growth in 2016, which could be as high as 30% over 2015. Let’s keep tabs on the company and see if its results matches expectation.

Disclosure: I have no positions in any stocks mentioned in this article.