Ford of Europe makes a turnaround, though passenger car share drops to 8.2%

Focus on global C-platform coming up 2011

2011/04/04

Ford of Europe makes a turnaround with an increase in 2010 sales volume, aiming for positive profit in 2011 as well

 With an increase in sales to 1.573 million vehicles in 2010 for the first time in four years, Ford of Europe recorded revenue of 29.5 billion dollars, up 4.2% over the previous year (increased 10.9% as whole Ford). Pretax profit moved from the red for last year to the black by 182 million dollars.

 It remained black by 107 million dollars in the first quarter in 2010 and by 322 million dollars in the second quarter of the same year. Yet, the turnaround has stalled since the beginning of the latter half with deficits by 196 million dollars and 51 million dollars in the third and the fourth quarters, respectively. Beside the decrease in sales, the deficits were caused by the soaring prices of raw materials, an increase in sales incentives, and the release costs of the new Focus higher than expected.

 Based on the forecasts of Ford of Europe that the EU markets (19 countries) will be 14.5 to 15.5 million-unit scale in 2011 (15.3 million in 2010), Ford of Europe will stay focused on its positive pre-tax profit in 2011.

Ford of Europe's business results

  Sales (dollars in billion) Pretax profit (dollars in millions)
2009 2010 2009 2010
Ford of Europe 28.3 29.5 (144) 182
Ford total 116.3 129.0 2,599 7,149
Sources: Ford 2010 Fourth Quarter and Full Year Earnings Review and 2011 Outlook (2011/1/28)

Ford's sales volume by region (wholesale)

(1,000 units)
  Ford and Lincoln brands PAG Grand Total
North
America
South
America
Europe Asia-Pacific
and Africa
2005 3,410 335 1,753 505 764 6,767
2006 3,051 381 1,846 589 730 6,597
2007 2,890 436 1,918 535 774 6,553
2008 2,329 435 1,820 464 359 5,407
2009 1,927 443 1,568 604 324 4,866
2010 2,413 489 1,573 838 - 5,313
Sources: Ford 2010 Fourth Quarter and Full Year Earnings Review and 2011 Outlook (2011/1/28)
NOTES: 1. Wholesale volume includes Ford-made vehicles (including OEM vehicles) and local brand vehicles made by non-consolidated affiliates.
2. The data include sales volume of Mercury brand vehicles, which were discontinued in October 2010.
3. Mazda6 produced at Automotive Alliance International is included in the sales volume in North America before 2008, but not included after 2009.
4. PAG's data after 2008 are Volvo brand vehicles only.
5. Sales volume in Asia-Pacific and Africa before 2008 includes sales of Ford brand vehicles sold by non-consolidated affiliates in China. Data after 2009 include those companies' sales volume of Ford and JMC brands vehicles.
6. Volvo's vehicles sales (211K) are not included in 2010 as special items. Total sales volume of Ford and Volvo was 5.524 million units.

Ford of Europe's quarterly business results

  2009 2010
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Sales volume
(1,000 units)
Europe 343 400 393 432 416 420 340 397
Ford total 986 1,194 1,238 1,448 1,253 1,418 1,253 1,389
Pretax profit
(dollars in millions)
Europe (585) 57 131 253 107 322 (196) (51)
Ford total (1,662) 2,241 1,112 908 2,135 2,847 1,887 280

Ford of Europe's 2011 Plans

European markets Automobile market sales of 19 European countries where Ford track are to be 14.5 to 15.5 million units (it was 15.3 million units in 2010). UK, German and French markets are heading for recovery, although there are uncertainties in periphery European markets due to governmental budget cuts.
2011 Plan In 2010, Ford of Europe posted an operating profit of 182 million dollars. It will stay focused on positive operating profit in 2011 as well.
Sources: Ford 2010 Fourth Quarter and Full Year Earnings Review and 2011 Outlook (2011/1/28),
Ford presentation material in J.P. Morgan Global High Yield & Leveraged Conference (2011/2/28)