AMSTERDAM: Ford Motor Co showed revamped versions of its key European models on Thursday, including a small sport-utility vehicle to challenge Nissan Motor Co's Juke, as it struggles to revive sales and curb mounting losses in the region.
Chief Executive Alan Mulally and other executives previewed several models to some 2,500 dealers, including the Ecosport compact SUV, which is due in Europe in the next 18 months. It will compete against the Juke which has proved highly successful in Europe.
The event was designed to assure Ford's struggling European dealers that it has attractive vehicles in the pipeline. Through July, Ford sales in Europe have slumped nearly 11 percent, with the overall market down about 7 percent. The automaker expects to lose more than $1 billion in the region this year.
Ford also showed the Kuga crossover and revealed plans to bring its medium-sized SUV, the Edge. The US automaker aims to sell 1 million SUVs in Europe during the next six years.
"Over the past five years, the SUV segments are the only ones to have grown in Europe, and it's forecast to continue," Jim Farley, Ford's global marketing chief, said at the event.
"Small is where the real growth happens. The small SUV segment in Europe will double in the next five years," he said, adding that sales of medium-sized SUVs may grow by a third.
Ford executives showcased the updated Fiesta small car, a European mainstay, the new flagship Mondeo, based on Ford's US Fusion model, and the new Transit commercial van. Mulally also announced that Ford plans to bring the Mustang car to the region.
"We're fully aware of the profitability situation across the dealer network in Europe," said Stephen Odell, Ford's head of Europe.
'VERY TOUGH'
The only major US automaker to escape bankruptcy in 2009, Ford recovered strongly from that crisis but has since lost momentum, with Europe emerging as its Achilles heel.
The Dearborn, Michigan-based automaker posted a $404 million European operating loss in the second quarter. It has projected a full-year loss in Europe of more than $1 billion, twice the previous forecast.
Ford plants in the region are blighted by excess capacity as the automaker's own sales shrink faster than the troubled overall market, eroded by cut-throat competition from newcomers such as Hyundai Motor Co and affiliate Kia Motors Co - as well as a shift in demand toward premium brands.
Even in Germany, where the auto market has so far escaped the worst of the regional slump, Ford dealers are feeling the squeeze with profit margins close to 1 percent amid rampant discounting, said Chris Wyrembeck, head of a three-showroom dealership in Dresden.
"It's very tough," he said. "We don't know where we're going to be at the end of the year."
But he added that Ford's push into SUVs is a welcome response to rising German demand in the category, singling out the updated Kuga mid-sized four-by-four.
In his remarks, Mulally described the "One Ford" strategy that spurred the company's turnaround in the United States partly by connecting Ford's once-disparate business units and building vehicles off global platforms to cut costs.
Mulally said Ford will accelerate the implementation of this plan in Europe. In five years, Ford expects that 71 percent of its European lineup will be built off a global vehicle platform.
"The most important thing we can do is acknowledge the current reality and develop a plan to deal with it," he said.
Ford also said on Thursday that it plans to ship Indian-built engines to Europe and other markets. It would be the first time the automaker has shipped Indian-built engines to Europe.
Ford shares were up 3.3 percent at $9.89 on the New York Stock Exchange at midday on Thursday.
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