There's probably some frustration growing among long-term Ford Motor Company (F 1.52%) shareholders. Over the past decade, Ford has learned many valuable lessons, improved its balance sheet, and continues to offer a lucrative dividend, but its stock price has remained stuck in the mud. Over that same decade, Ford's share price has risen a paltry 13%, compared to the S&P 500's 255% rise.
Investors hoping that Ford's hard work to improve its business will eventually result in a rising stock price should keep an eye on two developments that could jumpstart its idled stock price.
Long-forgotten Europe
If you're wondering where Ford's European news has been, you might not be alone. In decades past, Europe was one of Ford's most active markets and biggest talking points. But business there hasn't been easy, as its bread-and-butter large SUVs and pickups don't sell nearly as well in Europe as smaller, fuel-efficient, and/or electric vehicles (EVs).
Image source: Ford Motor Company.
In this case, no news is mostly bad news. Ford's market share in the European Union, European Free Trade Association, and United Kingdom markets has dropped to a meager 3.5%, down from its last strong year in 2019 at 7.8%. Make no mistake: For investors, this is a big loss, as Europe is one of the more lucrative global markets. That's especially true considering China is embattled in a severe price war that's crippling margins, and developing countries are generally less profitable.
Rejoice, long-term Ford bulls, because the folks at the Blue Oval have a new partnership with Renault in Europe, and it could give the company hope. The plan is to sell two new electric vehicles (EVs) based on Renault's electric small-car platform. It will be a massive victory for Ford to fill the shoes left empty after ending Fiesta production in 2023, leaving the automaker without its longtime entry-level best-seller.
NYSE: F
Key Data Points
What it all means
Ford returning to growth in Europe, profitable growth in particular, would be a huge win for investors. Its upcoming two new smaller and more affordable EVs are a lone bright spot for the automaker in the region. The catch, and something investors need to keep updated on in the coming years, is that timing could present a challenge. The two Renault-based models aren't expected until 2028. By that time, an influx of Chinese competitors, which have the potential to undercut global pricing, could have entirely changed the competitive landscape.
Ultimately, Ford is making moves to become competitive in Europe, and the automaker will need to execute sooner, rather than later, to become a better long-term investment.
