Restructuring Ford Europe Plans Models, Counts Profits

By Jones, Terril | THE JOURNAL RECORD, October 26, 1994 | Go to article overview

Restructuring Ford Europe Plans Models, Counts Profits


Jones, Terril, THE JOURNAL RECORD


PARIS _ Ford Europe is no longer the Continent's ugly duckling.

The Ford Motor Co. unit is making money and pumping out new models as it works to shake the stigma of being Europe's biggest money loser among automakers, an unwanted moniker it attained in 1992.

Third quarter earnings are expected today, following a second quarter in which Ford Europe reported strong profits. Earnings of $244 million in that period, not counting Ford Motor Co.'s troubled Jaguar division, were a far cry from 1992's $697 million loss _ $1.28 billion counting Jaguar.

On top of its financial turnaround, Ford Europe is finalizing a major reorganization of its vehicle development and planning to roll out an all-new subcompact to help drive it into a new market niche.

At the Paris Motor Show earlier this month Ford showed off its completely retooled Scorpio luxury sedan and unveiled its long-anticipated minivan, a joint project with Volkswagen to be sold beginning next year.

Within three years, Ford also plans to roll out its new subcompact, based on a round, huggable concept vehicle designed with safety, maneuverability and economy of operation in mind, Alex Trotman, chairman of Ford Motor Co., said in a speech given during the Paris show.

"We think there's a demand below the Fiesta level ... for young people, for a second car, for city traffic," Ford Europe Chairman Albert Caspers said in an interview.

Ford's demographic studies indicate an increasing number of female drivers on the roads of Europe, another market Ford wants to tap with its new subcompact. The automaker hopes the additional breadth of its vehicle offerings will help it improve market share against the competition.

For the first nine months of the year, Ford's share of the European market stood at 12 percent, ranking it as No. 4 behind Volkswagen, General Motors Europe and PSA Peugeot-Citroen.

"GM Europe has a better history in Europe than Ford. It's much better at making profits and renewing its cars than Ford Europe," said Gerard Ewenczyk, and automobile analyst at SAFE, the forecasting branch of Groupe Paribas, a banking group.

Renewing vehicles involves redesigning models to provide something new to draw consumers. The average replacement cycle for autos has been five years for Ford, compared with three years for VW and Opel and four years for Citroen, Ewenczyk said. …

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