Europe Is Looking Brighter for Ford Motor Company

High gas prices have made the Fiesta Ford's best-seller in Europe. Photo credit: Ford Motor Company

Like most of its competitors, Ford  (NYSE: F  ) has had a rough ride in Europe over the last few years. Severe recessions in many key European nations drove new-vehicle sales to lows not seen in two decades -- and Ford, along with several rivals, lost billions.

But the European auto market is finally starting to pick up -- and Ford's sales are looking strong. In this video, the Motley Fool's John Rosevear looks at Ford's latest numbers from the Old World, and explains why the picture should continue to brighten for Ford in coming months.

A transcript of the video is below.

Special free report: 3 stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal "The Motley Fool's 3 Stocks to Own Forever." These picks are free today! Just click here now to uncover the three companies we love. 

John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Ford announced on Tuesday that its sales in Europe rose 12% in March.

That was enough to give them an 11% gain for the first quarter. That's ahead of the overall market, which gained 10% in March and 8% for the quarter, so Ford gained market share. It was up to 8.9% in March, up two-tenths of a percent from March of last year.

These may sound like ordinary sounding numbers but Europe has been a big challenge for Ford and most of their rivals for several years now, so this is all actually very good news.

Ford is working hard to turn around its European operation, it lost $1.6 billion dollars in Europe last year, $1.7 billion the year before, but the company says it's on track to break even next year, and increasing sales and market share, especially in the retail and commercial vehicle markets, is one key part of how they're going to do it.

We have a habit of getting worried when automakers talk about fleet sales, because we associate the phrase "fleet sales" with low-profit sales to rental-car fleets. But Ford has been moving away from those kinds of sales in both the U.S. and in Europe, while continuing to go after commercial vehicle fleet sales.

That's things like work trucks and delivery vans, Ford considers that to be good profitable business and they compete hard for it. In the U.S. they do it primarily with pickups, but in Europe they sell a lot of vans, variations of the Transit van and the smaller Transit Connect vans, as well as the even smaller Transit Courier van and a commercial van version of the Fiesta hatchback, when you need something really small for your business. They also sell the Ranger pickup in Europe, in regular, super, and double cab versions.

And just as they are here, these commercial truck sales are a key part of Ford's business in Europe. Ford's commercial vehicle sales were up 10% in the first quarter, and Ford's share of the European commercial vehicle market was up to 10.4%, up two-tenths of a percentage point, they say that's their highest level since 1998. Meanwhile, sales to rental fleets were down as a percentage of total sales, so we like to see that.

Ford's top sellers in Europe continue to be the Fiesta and the Focus and the Kuga, in that order. Fiesta sales rose 7% during the quarter and we reported earlier in April that Ford had increased production of the Fiesta by 200 cars a day at its big plant in Cologne Germany, and they've been working extra weekend shifts.

The Kuga is the European version of the Escape, it replaced an old model that they made specifically for Europe. Sales were up 56% in the first quarter. Another part of Ford's turnaround plan is to expand their product lineup, they have 10 new models coming to Europe in 2014 and more next year, including for the first time the Ford Mustang, so they could continue to outpace the overall market for a while as they expand their offerings.

Long story short, the first quarter was great for Ford in Europe, and that means good news for Ford's profits over the long term. Thanks for watching.

Read/Post Comments (1) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 23, 2014, at 1:31 PM, SkepikI wrote:

    Thanks for transcript JR. Very valuable content that I would have missed otherwise. On track to solve all its big problems in the next 1-2 years. F the taxpayer's friend

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2916107, ~/Articles/ArticleHandler.aspx, 8/27/2015 10:42:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

John Rosevear

John Rosevear is the Fool's Senior Auto Specialist. John has been writing about the auto business and investing for over 20 years, and for The Motley Fool since 2007.

Today's Market

updated 1 hour ago Sponsored by:
DOW 16,654.77 369.26 2.27%
S&P 500 1,987.66 47.15 2.43%
NASD 4,812.71 115.17 2.45%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/27/2015 4:00 PM
F $13.56 Up +0.35 +2.65%
Ford CAPS Rating: ****