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Ford's Escape Is a Hit Overseas

By John Rosevear - Apr 3, 2013 at 2:05PM

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While Ford's new Escape is setting sales records here in the U.S., its European twin is leading the way for Ford's turnaround in Europe.

Like most of the automaker's recent models, Ford's (F 2.33%) Escape SUV, introduced here in the U.S. last year, has been a big hit with consumers.

Despite a rocky launch marred by recalls, the compact SUV has steadily gained market traction, recently exceeding the (very good) monthly sales numbers posted by its well-regarded predecessor.

In fact, the model just posted its best-ever sales month in March, with a 28% increase over solid year-ago sales totals. It has been such a success that Ford is now trying to figure out how it will make enough Escapes to meet demand.

That's a good problem to have. And in a rare bit of good news for Ford from Europe, it looks like the Blue Oval is having a similar "problem" with the Escape's European counterpart.

A hit for Ford in a challenging market
Ford said on Wednesday that it planned to increase European production of the Kuga, the Escape's European twin, by 10% this year to meet increasing demand for the sharply styled SUV.

European sales of the Kuga (which is essentially identical to the Escape in all but name) got off to a fast start after the model's introduction late last year. February sales were up 27% over year-ago totals, making the new Kuga a rare bright spot in what has been a dismal series of sales results for Ford's European branch recently.

In some ways, that gain for the Kuga is more impressive than the Escape's recent success in the U.S.

Big losses as Ford works to right its European ship
Ford, like rival General Motors (GM 2.19%) and most automakers doing business in Europe, has been hit hard by a sharp downturn in new-car sales. Steep recessions in many European nations have kept buyers away from showrooms. Sales fell to a 17-year low in 2012. Things have worsened since, with sales in previously robust areas like Germany starting to slip significantly as well.

But Ford has been hit harder than many rivals, a result of the automaker's reluctance to engage in steep discounting as it works to implement a comprehensive restructuring plan. That plan, a response to European losses that totaled $1.75 billion in 2012 and could rise to $2 billion in 2013, includes factory closings, staffing cuts – and a slew of new models for Europe, including a series of SUVs that Ford hopes will draw new buyers to the brand.

A promising sign for Ford's European turnaround plan
Ford's SUV lineup is well-known here in the U.S., but the company has never marketed its SUVs in a big way in Europe. That will change soon, as the company introduces the EcoSport and the upcoming all-new Edge to European buyers.

The EcoSport is a small SUV based on the Fiesta subcompact that has been a success for Ford in emerging markets. It's due to launch in Europe later this year, and will be followed by the next-generation version of the midsized Edge SUV, likely in 2014.

The success of the new Kuga bodes well for those and other upcoming Ford launches in Europe. It's another sign that the automaker's "One Ford" plan, which has led to big profits in North America, has a good chance of turning its European branch around as well.

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