Ford’s sales in Europe
Ford’s January European sales of 110,000 vehicle units were higher than its February sales and rose ~1.8% YoY (year-over-year). In 2017, Ford’s European market sales rose marginally by ~0.5% YoY to 1.4 million vehicle units.
Strength in all segments
In its Europe segment, Ford reports its vehicle sales in 20 traditional European markets on a monthly basis.
The company’s February sales of passenger cars rose 7.2% YoY to 74,000 units, while its sales of commercial vehicles also jumped 10.5% to reach 23,000 units in Europe. Higher YoY sales of commercial vehicles could help Ford improve the 1Q18 profitability in its Europe segment because commercial vehicles typically yield better profit margins for automakers compared to mass-market passenger cars.
Other key highlights in February
In February 2018, Ford Focus sales reached 15,000 units, a rise of 5.8% YoY, in Europe. Similarly, the sales of Ford Fiesta and Kuga also rose a significant 3.1% and 28.3%, respectively, last month.
In 4Q17, Ford’s vehicle sales in Europe rose ~7% to 416,000 units, which also helped it boost its revenue by 12% in the region. However, its operating margins in Europe continued to disappoint due to higher contributions and structural costs along with currency headwinds.
Note that the majority of global auto companies (XLY) have reported falls in profitability in European markets in the last couple of years. Challenging economic conditions, slow economic recovery in many European countries, and Brexit are some of the key factors that have been affecting automakers in Europe.
Ford’s direct peer General Motors (GM) decided to exit Europe earlier this year in order to protect its profit margins. GM sold its Opel and Vauxhall brands to PSA Group. However, automakers such as Ford, Toyota Motor (TM), and Fiat Chrysler Automobiles (FCAU) continue to sell their vehicles in Europe in hopes of near-term recovery.
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