Ford Forecasts Fifth Profitable Year in Europe
By Michelle Krebs February 1, 2008Ford is forecasting a fifth consecutive year of European profit as new models
such as the Focus, Kuga and Verve boost sales in the region.
"We should have a solid year of profit,'' John Fleming, Ford of Europe chief, said in a telephone interview with Bloomberg News Friday from his office in Cologne, Germany. "I certainly intend for sales to be better in 2008 than in 2007.''
Ford's European sales advanced 5.4 percent in 2007 to a record 1.83 million vehicles on demand for the Fiesta, which the Verve will replace, and Focus models. Ford of Europe, critical to the success of Fordâs total turnaround, more than doubled pre-tax profit last year to $997 million. The division's profit helped the carmaker narrow its loss last year to $2.67 billion euros from $12.6 billion in 2006, Bloomberg noted.
At the end of 2007, Ford introduced the restyled Focus; in 2008 it will introduce the Kuga crossover and a subcompact car currently dubbed the Verve, the first truly global vehicle for Ford.
Ford also is relying heavily on its European operations to develop more models, like the Verve, to build and sell globally.
The Verve will be built at Ford's plants in Cologne and Nanjing, China, as well as a third European location, which the carmaker has yet to disclose, Fleming told Bloomberg.
He also said Russia and Turkey will probably be the main markets driving the European sales increase in 2008. Ford is spending $100 million to expand capacity at its St. Petersburg, Russia, plant in 2009 by 74 percent to 125,000 vehicles from about 72,000 last year. The plant will build the midsized Mondeo.
At the same time, Fleming told Bloomberg he's "really worried'' about how the UK and German markets will develop this year. Industrywide purchases in Germany fell 9.2 percent in 2007 to 3.15 million vehicles following an increase in the sales tax last January; sales in the UK rose 2.5 percent to 2.4 million vehicles. Britain is Ford's biggest European market.
`"We're concerned about Britain with everything going on -- exchange rates, the economy and so forth,'' Fleming told Bloomberg. "In Germany, savings are increasing and generally the economy is doing well but that is not translating through to sales.''
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Europe faces higher priced fuel that we do so why don't we bring some of these units to the States. They wouldn't sell if they had poor mileage. Put small turbo diesels in them and put them on a boat or better yet build them here. I'm holding off buying another vehicle until it's diesel and preferably diesel electric.
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