Ford ready to sacrifice market share to concentrate on profits

Article by Christian A., on August 29, 2010

As new-car sales have dropped with the phasing out of scrappage incentives, Ford Motor Co. is prepared to give up some of its market share in its 19 main European markets to focus on profits.

Ford largely benefited from the European governments' incentive programs that were given to those who traded in their old cars for new models.

Ford recorded 10 straight months of volume gains but its winning streak ended in April when sales dropped by 17% in its European markets. And in May, sales dropped by 14%.

At the Automotive News Congress, Ford of Europe CEO John Fleming said that the division decided that profit is more important than share.

Fleming said that Ford isn't giving up on total market share but it is aiming to find the "right balance" so that it can still be profitable this year and the brand will not be diluted.

Ingvar Sviggum, Ford of Europe's head of marketing, sales and service, said Ford is prepared to lose European market share and sales "in a controlled way."

He said that Ford has been ready since a long time ago to tackle the slowing down in the market. He also commented about its rivals' heavy discounting strategy, which he believes is "ultimately unsustainable," can harm the brand.

He added that Ford has put in place "a simple, consistent and effective plan" to increase its volume and share "where it makes good business sense to do so, such as in Turkey." In May, Ford's market share in its main 19 European markets was 8.2%, 0.7 percentage points down on May 2009.

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Topics: ford, profit

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