Stop me if you've heard this before: The situation in Europe is dragging down automakers' profits. A shocker, right? Despite the gloomy conditions in Europe that have burdened Ford (NYSE:F), General Motors (NYSE:GM) and other automakers, Ford has managed to narrow its losses on the bottom line. Yesterday Ford released more sales information for its Europe operations and there was one really bright spot for investors hoping for a quicker turnaround in profits.

Graph by author. Source: Ford's SEC filings.

By the numbers
While Ford's overall market share in Europe was roughly flat, it managed to increase retail sales by 14% last year. That increase was good enough to move its retail market share up a full percentage point to 8.2%. Ford's improving retail share should give investors hope that once conditions in Europe begin to improve the company will be poised to take advantage of products that consumers are demanding – more on that in a second. 

Ford's improved retail sales are in addition to its decision to significantly reduce sales to rental fleets and dealer self registrations. That means the folks at the blue oval are focusing on more profitable sales, not just holding on to market share at all costs, and that will pay off with a better brand image and residual values with its vehicles going forward – a proven winning strategy for long-term investors.


Ford's Mondeo should sell well in Europe. Photo credit: Ford Motor Company

However, maybe the most important bit of information for investors hoping Ford will turn profitable in the region quicker is that 43% of its vehicles sold last year were all-new or significantly refreshed models. The importance of that statistic shouldn't be understated; Ford's new designs are popular and are setting the company up for success in the back half of this decade.

"Our retail success demonstrates the importance of continuing to invest in new vehicles even in the most difficult economic environments," said Stephen Odell, president, Ford Europe, Middle East and Africa, in a press release.

For 2013 Ford sold 1.1 million vehicles in Europe's 19 traditional markets which secured its spot as the No. 2 selling brand in the region for the sixth consecutive year. Ford's Fiesta continues to be the top-selling compact nameplate in the world and led the charge in Europe with a total of 290,500 units sold.

Moreover, investors should be thrilled to know that while its new vehicles have proven to sell well, Ford is planning to continue its surge of vehicle launches with seven new model roll outs this year in the region. Ford plans to unleash the EcoSport, which has been well received internationally, the Transit, Transit Courier, Tourneo Courier, Mondeo (Fusion), Mondeo Hybrid and C-MAX Energi plug-in hybrid.

With revenues being driven by new vehicles, and profits being driven by a focus on higher margin sales, expect Ford to reach its goal of breaking even or producing a profit in Europe in 2015. If conditions in Europe improve quicker than expected Ford will be prepared to take advantage of pent-up demand with one of the freshest and most popular vehicle lineups in the industry. This is all great news for investors that have grown tired of annual losses in the region that are sucking over a billion dollars from the bottom line annually.

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Fool contributor Daniel Miller owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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