Images

Ford's 2017 Fiesta. Image source: Ford Motor Company.

Ford Motor Company's (NYSE:F) operations in Europe have been an enigma since the Great Recession. Initially, the company burned through billions in cash until business bottomed out and then years of slow but sure progress followed. Then last year Ford finally broke through with a full-year profit and investors were certain it was going to be sunshine and rainbows from then on.

While that hasn't exactly played out, in part thanks to Brexit, let's take a look at Ford's data that shows a slight loss in market share, but surging profits.

Glass half full?

Ford's November sales in its traditional 20 European countries (Euro 20) reached 104,700 units, a 4% gain compared to the prior year. Despite the gain, Ford actually lost 20 basis points of market share, down to 7.7%, within Euro 20. In the full-year results through November, Ford's total sales are up 6%, to 1.24 million, marking the company's best 11-month result since 2009. Again, despite the increase in total sales, the carmaker was outpaced by the market and lost a slight 10 basis points of market share in its Euro 20, bringing the metric down to 7.9%.

However, losing market share isn't always a bad development -- despite what many investors believe. One great example this year has been General Motors (NYSE:GM) and its focus on significantly lowering less profitable fleet sales. GM's fleet sales generated only 19.4% of its total sales, far less than its historical norm and 3.2 percentage points, or 320 basis points, fewer than last year through November. That's put a lid on GM's total market share, but the company's margins have improved.

And as Ford notes below, it too is focusing on more lucrative sales.

"November was another strong month for Ford as we continued making progress toward increasing high-revenue sales, such as commercial vehicles, SUVs, performance cars and higher-spec vehicles," said Roelant de Waard, vice president of marketing, sales, and service at Ford of Europe, in a press release. "Our strategy helps build a sustainable business, strengthen the Ford brand and improve residual values."

Highlights

Let's dig into some of those high-revenue segments mentioned in the quote above. Sales of Ford's higher-spec models -- think more premium trims such as Titanium models, Vignale, Fiesta, and Focus ST, among others -- generated roughly 60% of total sales through November. Much of that was from the premium Titanium trim alone, which generated just under 39% of car sales through November.

Moving to Ford SUVs, which of course generate higher transaction prices and margins but historically haven't sold as well overseas, the segment has generated 173,300 sales through November. That result is a 35% improvement compared with the same time frame in 2015.

Last, Ford again retained Europe's No. 1 commercial vehicle brand title during November, and remains the market leader in its Euro 20 year to date. Sales checked in 17% higher, to 300,000 commercial vehicles, through November.

On the bright side: better profits

Ultimately, despite losing a marginal amount of market share in Europe this year, Ford's focus on more lucrative sales has helped its bottom line. Ford's $138 million third-quarter pre-tax profit was its best third-quarter performance since 2007, and its sixth consecutive profitable quarter. In addition, Ford has jumped past its $600 million pre-tax full-year goal and already topped $1 billion through the first nine months of 2016.

While we'll have to wait and see how significantly Brexit will impact the company's fourth-quarter and 2017 results, investors can at least rest happy knowing Ford's operations, the only aspect it can control, are much healthier than in years past. 

Daniel Miller owns shares of Ford and General Motors. The Motley Fool owns shares of and recommends Ford. The Motley Fool recommends General Motors. 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.