Ford Motor Co. is counting on new models such as the EcoSport compact sport-utility vehicle to help reduce reliance on low-margin sales to rental-car companies in Europe to stem losses in the region.
According to Bloomberg, Ford plans to lower its share of deliveries to rental fleets to less than the European industry’s 13 per cent average by early 2015 from 17 per cent now, Roelant de Waard, the United States company’s head of sales for the region, said in a telephone interview.
The carmaker plans to continue boosting the proportion of sales to retail and company-fleet buyers, which typically order cars at higher prices.
Ford is in the midst of an overhaul of its model lineup, which will include a redesigned Mondeo mid-size sedan by late next year, when the company foresees the European market beginning to rebound from a six-year slump.
The Dearborn, Michigan-based automaker forecasts losses in the region will widen to about $2bn this year from $1.75bn in 2012.
“We’re expecting some improvement next year” in industrywide demand, de Waard said from Ford’s European headquarters in Cologne, Germany.
“He forecast that sales in Ford’s main markets in the region will rise to about 14 million vehicles in 2014 from roughly 13.5 million this year.
In May, Ford’s deliveries fell 2.2 per cent to 99,400 vehicles in 19 European markets stretching from Portugal to Finland.
The decline, which was less than a 6.2 per cent industry-wide drop across the region, lifted the company’s market share in May to 8.3 per cent, the highest level for the month since 2009, from eight per cent a year earlier, Ford said in a statement.
“It’s fair to say that with the newness and the freshness of our model lineup that we expect growth” in Ford’s market share in Europe next year, De Waard said.
The European auto market is likely to remain at current levels through the rest of 2013, with stable or deteriorating pricing for the industry as competitors shift more vehicle sales to rental companies, De Waard said.
The proportion of Ford’s deliveries to retail buyers was slightly ahead of other European automakers through the first five months of 2013, and its share to fleet buyers is in line with the average, De Waard said.
Ford’s rental sales mix has declined by five percentage points from 19 per cent a year earlier.
Its share of deliveries to dealers’ demonstration fleets shrank by five percentage points to 11 per cent to trail the industry average of 18 per cent.