Europeans Love SUVs, Too: Ford's Europe Sales Are Rising

Strong demand for Ford SUVs is helping to offset softening sales of its car models in Europe.

John Rosevear
John Rosevear
Jun 13, 2017 at 7:21PM

Ford Motor Company (NYSE:F) said its sales in Europe rose 6% in May, on strong demand for its small and midsize crossover SUV models.

The raw numbers: Ford's gains slightly trailed the market's 

Ford sold about 118,000 vehicles last month in the 20 Western and Central European markets (the "Euro 20") that it considers its core market in the Old World. That's up 5.8% from a year ago. But it lagged the overall market's 7.6% advance, meaning Ford's market share fell 0.1 percentage point from a year ago, to 7.4%.

In Europe as a whole, including Russia, Turkey, the former Soviet republics, and the countries of Eastern Europe (what Ford calls the "Euro 50"), Ford sold about 136,700 vehicles in May, up 6.5% from a year ago. Its market share in the Euro 50 was flat at 7.4%.

Ford said its market share rose in Germany, Turkey, and France from a year ago.

A 2017 Ford Kuga Vignale SUV.

Ford's Kuga Vignale -- imagine an extra-plush Escape Titanium -- is one of several "high-series" models boosting Ford's profit in Europe. Image source: Ford Motor Company.

What's working (and isn't) for Ford in Europe now

For years, Ford's biggest sellers in Europe have been the small Fiesta and compact Focus, in that order. That's still true, but third place is now occupied by the Kuga crossover SUV, the European-market twin of the Escape that's sold here in the United States.

Ford sold about 11,800 Kugas in Europe last month, up about 9% from a year ago. It also sold about 5,900 examples of the small EcoSport SUV, up almost 16%, and about 1,400 of the larger Edge SUVs, up from just 400 or so a year ago, when it was new to Europe. As a group, Ford's SUV sales rose 17% in the Euro 20 in May.

Ford's commercial vehicles, including its Transit van lineup, are also doing well in Europe, as they are elsewhere. Ford's commercial-vehicle sales in the Euro 20 were up 16% in May from a year ago, and its share of the commercial-vehicle market in that region was a healthy 13.3% last month. 

A blue Ford Transit van in London.

Ford's familiar Transit van is a strong seller in Europe: Sales of Ford's commercial vehicles in the Euro 20 rose 16% last month. Image source: Ford Motor Company.

As is true in other parts of the world, Ford's car models aren't faring as well as its SUVs and vans. The story there is simple, and one we've seen at other automakers as well: More buyers are choosing SUVs over sedans, and sales of the latter have suffered. While Fiesta sales were up 5% to about 24,600, sales of the larger Focus and Mondeo, twin to the Fusion, were down 10% and 6%, respectively. 

Analysis: Ford is on track for another profitable quarter in Europe

Unlike rival General Motors (NYSE:GM), which is in the process of selling its European operation to French automaker Peugeot SA after concluding that it couldn't turn a sustainable profit in the region, Ford's European operation is solidly profitable. It earned $176 million before taxes in Europe in the first quarter, and $1.2 billion before taxes in 2016.

Ford's first-quarter profit in Europe was down on some recall-related costs even though its revenue rose 10% from a year ago on a 13% increase in sales. Two months into the second quarter, Ford's sales in Europe are down a bit from 2016 after an 11% drop in April. But its most profitable products -- high-trim versions of its sedans and SUVs, and its commercial vehicles -- continue to do well, suggesting that Ford is on track for another solid profit in Europe in the second quarter.