At first glance, March was another rough month for Ford (NYSE: F ) in Europe.
The Blue Oval's sales in what has traditionally been its second-most-important market were down 16% over the year-ago period. Continued declines in new-car sales in important markets like Germany had industrywide sales levels near 20-year lows for the month.
Ford's sales have been declining faster than the overall market in recent months. That was true again in March, as new-car registrations were down 10.2% in the region.
But to hear Ford executives tell it, not all of the news was bad for Ford.
Some signs that Ford's turnaround plan is taking hold, despite tough conditions
"We are not quite seeing green shoots of an economic recovery yet, but we are seeing some green shoots for Ford in Europe now," Ford Europe chief Stephen Odell said in a statement.
What does Odell mean? It means that Ford is looking at the numbers from a different perspective. The turnaround plan for Europe that Ford announced last fall has several components, and deep in the numbers are some early signs that those components are starting to bear a little fruit.
Over the last few months, Ford has reduced sales to rental fleets in Europe, preferring to focus on (much more profitable) retail sales, a key part of the turnaround plan. That has lowered the Blue Oval's overall sales numbers, but it has helped Ford's margins – and it will help keep "residual values", the values of used Fords, strong. That in turn will help preserve Ford's pricing power in the long run.
And when we look at retail sales, we see some promising signs for Ford. The company noted that its retail market share in Europe was up slightly in the first quarter, as was its market share in the commercial vehicles segment. In fact, Ford said that it "achieved its highest monthly retail market share in three years in March."
What drove those gains? New models, Ford said. The new Kuga – a twin to the U.S.-market Escape – did well, as did the just-refreshed Fiesta subcompact. Sales of the Focus compact were strong as well, and both of Ford's small cars gained market share in their segments.
Will things get better any time soon?
So when will things start getting better in Europe? It's hard to say, but it's unlikely to be soon. In an interview with Bloomberg on Wednesday, Odell said that he was hopeful that sales were "near the trough", though he didn't hold out much optimism for the second half of 2013.
That seems to be the consensus view, as 2013 has already turned out worse than many expected. What started out as a problem in southern European countries like Italy and Spain last year has spread, as those weaknesses have led to a drop in Europe market exports from previous strongholds like Germany.
Ford's not the only one struggling, of course. General Motors' (NYSE: GM ) Europe sales were down 13% in March, and Toyota (NYSE: TM ) saw a 17% decline. Volkswagen (NASDAQOTH: VLKAY ) , which had been doing relatively well thanks to Germany's strength, saw sales drop by 15% on the month.
But while improvements may be slowly taking hold, it's likely to be another year of red ink for Ford in Europe.
Will Europe hold Ford's stock back?
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