Ford overtakes GM in Europe, as it is recovering more briskly on the market

Article by Christian A., on January 29, 2013

In the latest fourth quarter, Ford Motor Co. had its lowest operating profit of the year. But there’s a bright lining in Europe. Ford is recovering more briskly in Europe than its rivals as it uses its revival in the U.S. as a guide. Ford has reported losses of over $1.5 billion for the full year in Europe and has predicted that 2013 will be no different.

When interviewed at the Detroit auto show, CFO Bob Shanks said that these losses will start to vanish in about two years. Peter Nesvold, a Jefferies Group Inc. analyst, said that Ford will be ahead of General Motors Co. by about a year in its efforts to overhaul operations in the region. He said that the automaker’s board has demonstrated more conviction in its European restructuring plan by doubling the quarterly dividend earlier this month.

In an interview, Nesvold said that Ford was able to achieve what it set out to do in North America without any external help. He explained that the issues in Europe are not identical but they are similar. In the fourth quarter, the revenue of Ford fell by 4.4% to $33.1 billion, the average of 11 estimates compiled by Bloomberg, from $34.6 billion the previous year. The average of 19 estimates is for 26 cents of operating profit per share, up from 20 cents a year earlier.

CFO Shanks said that the past nine months for the company have been “wonderful” when it comes to raising its profitability, margin and in posting a highly positive operating cash flow. He expressed confidence that this trend will continue. In 2006, CEO Alan Mulally came to Ford from Boeing Co. He used $23.4 billion that the company borrowed late that year to revamp its range of fuel-efficient models like the Focus and Fiesta.

The next generation Focus was built with Ford’s new global C-segment platform and was developed in Europe and has been sold in over 120 markets worldwide with 80% parts commonality.

This platform can accommodate and support at least ten vehicles worldwide. Since 2012, it already accounted for 2 million units of production each year starting in 2012.

According to Kuzak, one important element of the global C-car strategy is the introduction of the three core Ford Focus body styles. After a few months, the production of Ford will start in the Saarlouis and Michigan plants. As soon as it begins, the vision will be realized with the delivery of a minimum of 10 new derivatives from the platform throughout the world.

At Paris, Ford also clarified that it will not be adding three-door or Coupe-Cabriolet derivatives on the three-model next-generation Ford Focus lineup.

Kuzak explained that though there was actually a plan to adopt the suggested sleek, coupe-like design for the five-door hatchback, it found out there was a little room for a three-door version. He added that practicality, sporty and dynamic looks embody the three-model Focus range.

For buyers who want the same dynamic and sporty appearance with more space, Ford’s latest C-car line-up is recommended. It is a perfect car to suit their needs as it offers the stylish new C-Max.

Topics: ford, gm, europe, sales

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