Ford of Europe: A Paper Tiger?

by Cammy Corrigan

December 14th, 2009 5:59 PM

While Ford is slowly but surely gaining traction in North America and China, Europe is storming ahead. Over at paddocktalk.com there’s report on Ford of Europe’s latest sales, which jumped 19.8% in November. This marks Ford’s sixth consecutive volume increase, resulting in a 9.1% year to date market share. “November was another month with outstanding volume gains for Ford of Europe”, said Roelant de Waard, Ford of Europe’s Vice-President for Sales. “Having the right products at the right time is paying off, and this is why we’re continuing to strengthen our position as the clear No.2 choice for customers in the European auto industry.” A key point included how 63% of their sales went to retail customers, which was an increase of 13%. Increase in sales? Increase in retail customers? Increase in market share? It all sounds great! Until you dig a little deeper.

When I read the article, something didn’t sit right. Why did they keep mentioning “volume” and market share? So I did a little digging around and found a website ( www.autoebid.com) which specialises in third party broker car deals. Brand new cars at discounted prices. Under the Ford section I found a Ford Fiesta 1.4 Titanium 5 door Auto with 18% off the Recommend Retail Price (RRP). A Ford Galaxy 2.0 TDCi Ghia 5 door Auto with 22.54% off the RRP. A Ford Focus 1.6 Style 5 door Manual with 27.56% of the RRP. A Ford Mondeo 2.0 TDCi Titanium X Sport 5 door Auto with 29.52% off the RRP. In comparison, a Toyota Yaris 1.3 VVT-i TR Auto has 7.75% off its RRP, a Toyota Auris 1.3 Dual VVT-i T2 5 door manual has 8.78% off its RRP and a Toyota Avensis 2.2 D-CAT T-Spirit Auto only has 10.31% off its RRP. In an industry where everyone is aiming for a 10% profit margin, and a scrappage incentive should be keeping other discounts down. This is bad news for Ford. Which now makes me wonder if this increase in “volume sales” is actually a good thing? Is the jump in sales more to do with the fact that there were some fantastic bargains to be had at Ford dealerships? The real test of strength in Europe for Ford will be when it comes to announcing financial results.

#Europe #Ford #Incentives #Sales

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3 of 11 comments

Jdmcomp on Dec 14, 2009

Yep the Ka is coming to America, but not as a Ka, but rather in its native format, the Fiat 500, yes that is what it is underneath, but with a Ford engine.

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- Mirko Reinhardt on Dec 15, 2009
  
  The Ka doesn't have a Ford engine. The complete engine lineup is all Fiat.
  
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Charly on Dec 14, 2009

In some European markets a very high percentage of cars are sold as employment perk so your statement that increasing retail sales is good maybe incorrect for those markets. Selling retail in those countries just means selling cheap cars.

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