Ford Motor Company (NYSE:F) said that its sales in Europe fell 2.4% in August, as tight supplies of the all-new Fiesta once again offset good year-over-year gains for its smaller SUVs. 

Year to date, Ford's sales in Europe are still up about 2% from the same period last year.

The raw numbers: The Fiesta has made a big dent

Ford sold about 73,100 vehicles in August in the 20 Western and Central European markets that it considers its primary market in Europe (the "Euro 20," in Ford's lingo). That was down 2.4%, or about 1,800 vehicles, from its total in August 2016. The decline dropped Ford's market share in the region by about 10 basis points from a year ago, to 7.1% for the month.

A 2018 Ford Fiesta hatchback in teal, with a European license plate, parked on a cobblestone surface in front of an old cafe.

Sales of the Fiesta, Ford's best-selling model in the Euro 20, were down by about 6,100 vehicles from its total in August 2016. Demand for the all-new 2018 model has been strong, but supplies have been tight. Image source: Ford Motor Company. 

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 88,300 vehicles in August, down slightly (about 300) from a year ago. Ford's market share in the Euro 50 was roughly flat from its year-ago result, at 6.9%.

Ford's SUVs and commercial vehicles are still selling well 

It's a familiar theme, with a twist: Sales of Ford's SUVs and commercial vehicles are up, while its car models have slipped. The twist in this case is that the little Fiesta is a perennial best-seller in Europe, and the sales decline is about supply, not demand.

But the good news is genuinely good. In Europe, Ford's SUV lineup consists of the small EcoSport, the compact Kuga (the European version of the Escape), and the midsize Edge. Sales of all three were up significantly in August:

  • EcoSport sales by 25% to about 4,000;
  • Kuga sales by 18% to about 9,200; and
  • Edge sales by 37% to about 1,100.

Ford's commercial-vehicle lineup in Europe includes the midsize Ranger pickup and its Transit and Tourneo van families. ("Tourneo" is Ford's European-market name for the passenger versions of the Transit vans. 

Ford's four Transit van models, parked side to side. From small to large: Transit Connect, Transit Courier, Transit Custom, and Transit.

Ford's Transit vans are offered in four sizes in Europe. The smaller three are also available as passenger vans, under the Tourneo nameplate. Image source: Ford Motor Company. 

These are solidly profitable products for the Blue Oval, and they're doing well in the Old World: Sales of Ford's commercial vehicles as a group were up 7.3% in August, with about 22,400 sold. Year to date, Ford's commercial-vehicle sales in Europe are up 9.3% from a year ago.

More Fiestas are coming: Ford's sales should jump from here

As I noted above, Ford's year-over-year sales drop in the Euro 20 (about 1,800 vehicles) was more than explained by the big year-over-year drop in sales (about 6,100 vehicles) of the subcompact Fiesta. 

Ford has emphasized that the issue is supply, not demand. The Fiesta is normally Ford's best-seller in Europe, and Ford gives it the attention you'd expect. Over the past few months, Ford has been in the process of rolling out an all-new 2018 Fiesta, and production of the all-new model has taken some time to ramp up.

It's a situation not unlike the one we saw in the U.S. in 2015, when Ford was rolling out an all-new version of its best-seller here, the F-150 pickup. F-150 sales were down for months because of tight supplies, but they more than recovered after production of the new trucks was up to full speed. Likewise, the Fiesta is so significant for Ford in Europe that tight supplies of the little car more than explained its entire 2.2% second-quarter sales drop

The happy news is that Ford reports that its Fiesta production lines are now back up to full speed, so sales should be strong going forward.