Ford (Part 2): Rationalization and Aggressive Product Enhancement in Europe and China
Improving profitability: CVs and electrification in EU, SUVs and localization in China
2020/11/25
- Summary
- Europe: Expanding commercial and electrified vehicle lineups in parallel with restructuring
- China: Stopping the long-term decline by strengthening locally manufactured SUV lineup
- South America: Reorganizing production system to reduce deficit
- Global Revenue: Improved in Q3 2020, and upwardly revised full year forecast
- Production Forecast by LMC Automotive: Ford Group's production in 2023 will be 5.4 mn units
Summary
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| Territory SUV launched in the Chinese market (Exhibited at the 2020 Beijing Motor Show) |
In Europe, Ford will reduce costs by implementing restructuring measures such as the rationalization of production systems, while expanding its lineup of commercial vehicles, a Ford competitive strength, and electrified vehicles such as hybrids, for which demand is increasing.
In China, where sales have been shrinking and large deficits continue, Ford has strengthened its alliances with local partners and launched a series of new locally manufactured SUV models in quick succession from 2019 onwards. The effect of the product lineup renewal has resulted in a recovery trend in sales and profitability since the beginning of 2020.
Ford's global earnings in 2020 were significantly impacted by the contraction in global demand in the first half of the year, but earnings improved in the third quarter (July-September). This was enabled by the economic recovery in each region, and the company has upwardly revised its full-year 2020 earnings forecast.
Ford Group's medium-term production (up to 2023), after declining in 2020, is forecasted to gradually increase to 5.37 million units in 2023 (+4.9% vs. 2019). Growth is expected to be driven by the U.S. and China, while in Europe production is expected to shift from Western Europe to Eastern Europe.
This report is the second part of two reports on Ford, with Part 1 providing an overview of Ford’s North American operations and new management structure. Part 2 focuses on Ford's status in the European and China markets, as well as its latest corporate financial results, including the most recent medium-term global production forecast data by LMC Automotive.
Related reports:
Ford (Part 1): Collaboration with VW and targeted investment under new CEO (Nov. 2020)
The Impact of COVID-19 on the Automotive Industry (Nov. 2020)
Start of USMCA and Mexican automobile industry trends (Jul. 2020)
OEM Measures to Expand Sales of SUVs and Pickups in the U.S. (May 2020)
CES 2020: Electrified vehicles and technologies (Feb. 2020)
Ford's Corporate Transformation (Part 2): Restructuring and Vehicle Portfolio (Sep. 2019)
Ford’s Corporate Transformation (Part 1): Partnership with VW on CVs, AV and EVs (Sep. 2019)
U.S. OEM Electrification Strategies, Including EV Product Timelines (Sep. 2019)
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