Ford targets higher European market share on competitor woes

Ford Motor Co is counting on upgrades to the Fiesta hatchback and EcoSport compact SUV to grab market share in Europe, offsetting weakening demand for diesel models and the fallout from the UK’s plans to exit the European Union.Discussions in Germany over potential driving bans for diesel cars have hit Ford, contributing to a drop in demand for the higher priced vehicles by about 6 percentage points this year, Steven Armstrong, the head of Ford’s operations in Europe, Middle East and Africa, said in a Bloomberg TV interview. While that adds to headwinds from Brexit, Ford sees prospects to take advantage of distractions facing the likes of Volkswagen and Opel.“We see some opportunity for share growth across the region,” Armstrong said, adding that the company is “well-positioned” to shift from diesel to gasoline engines and hasn’t faced the diesel-model recalls plaguing Volkswagen and other automakers. To weather any headwinds in Europe, Ford is “working hard” to lower costs.While Ford has managed to end losses in Europe, its margin in the second quarter slumped to 1.2% of revenue from 5.8% a year earlier as the company battled with the impact of Brexit on the pound. Boosting profitability in Europe is key to helping Dearborn, Michigan-based Ford wean itself off dependence on the US market. The car maker is keeping an open mind on more collaboration with other companies to generate savings, Armstrong said in a separate interview.Projects could include sharing underpinnings on models with another manufacturer to increase scale, in addition to Ford’s participation in a venture to build a Europewide fast-charging network for battery-powered vehicles and its joint work on electric delivery vans with Deutsche Post. Ford already shares engine production with PSA Group, the French maker of Peugeot, Citroen and DS cars.Armstrong, 53, took responsibility for Ford’s European division three months ago after serving as the unit’s chief operating officer. The US car maker reorganised management ranks in the wake of the appointment of Jim Hackett as chief executive officer in May to accelerate decision-making and boost efficiency.Hackett has visited Ford production sites in Turkey, where the company makes vans, and Russia, as the new CEO considers capital allocation across the whole business, future revenue opportunities and ways to boost innovation. Ford’s business in Russia has “a bright future” as sales recover, Armstrong said. The country’s auto market could return to its previous peak of 3mn annual deliveries after dropping by half during the nation’s recent recession, he said.Ford, the third-biggest car brand in Europe, is sticking it out in the cut-throat market. By contrast, Detroit rival General Motors Co pulled up stakes by selling Opel and its UK sister Vauxhall nameplate to PSA active after failing for years to end losses at the German-based business.“Our business in Europe is an embedded part of Ford,” said Armstrong. “Europe is the lead development for our small to medium cars and Transit vans, and many of the leading suppliers are here.”Buoyed by growing demand for the Kuga crossover and the Transit, Ford sold 845,300 vehicles in its 20 main European markets in the first seven months of 2017, up 0.3% from the previous year. The Fiesta subcompact, which has been overhauled, is the brand’s bestselling model in the region, where economic uncertainty is swirling as the U.K. discusses terms for its EU departure. Britain is Ford’s largest market in Europe.In a sign of pressure to lower costs, Ford is toning down its presence at the Frankfurt auto show later this month. It reduced the size of its stand by more than 10% and won’t hold a press conference to present a limited-run “Black Edition” of the Ranger pickup, which is a niche model in Europe.At the same time, to shore up its local appeal, Ford appointed Amko Leenarts as new design chief for Europe in July and hired Sarah-Jayne Williams as its first director overseeing development of new mobility and transport offerings in the region.