News - Ford
Ford to transform European operations
In doubt: Ford's Ka micro-hatch is reportedly on the chopping block as the car-maker looks to cut under-performing models.
New SUVs are expected, some models face the axe as Ford rolls out European strategy
4 February 2016
FORD of Europe has announced that it will kill off under-performing models and
introduce a rash of new ones as part of its “transformation plan” targeting
improved profits from this year.
Part of the plan is to introduce five new SUVs on the continent in the next
three years. These will include updated versions of the Kuga mid-sizer and
EcoSport crossover, as well as the new Edge large SUV.
So far there has been no official confirmation of what the other two models
are, but Autocar is reporting that they could be a pair of crossovers
based on the Fiesta and Focus.
Given the Kuga is based on Focus and the EcoSport shares its underpinnings with
the Fiesta, it could mean that Ford is heading down the path of offering SUV
variants, possibly in the form of lower-slung, coupe-like offerings, much like
Mazda is expected to do with the launch of a production version of the swoopy
It is unclear if the European product roll-out will have any impact on the
Australian market and whether the two new SUVs will be made available Down
Under, or if they will remain European-only models.
Ford Australia announced in late 2014 that it would release 20 new-generation
or refreshed models by 2020. Some of those models have already launched,
including the Mustang, refreshed Ranger pick-up and related Everest SUV,
facelifted Focus and all-new Mondeo.
If more SUVs are launched in Australia, they will join the EcoSport, Kuga,
Everest and the Territory replacement – likely to be the Canadian-built Edge.
In terms of the European strategy, Ford will launch seven new and refreshed
models this year, including the Focus RS, and it will streamline its core model
line-up by ditching less-profitable offerings over time.
Ford did not detail the models that could be facing the axe, but Autocar
is reporting that it could include the Ka micro car that is expected to end
production this year.
The car-maker is hoping to lift its SUV sales by 30 per cent this year compared
with 2015 on the back of the new or refreshed models and it wants to hit 40,000
sales for its performance models that includes the Mustang, Focus RS and ST and
It will also expand its premium Vignale line, beyond the upscale version of the
Mondeo, to at least five models by 2017.
New hybrid, plug-in hybrid and full electric vehicle models will be rolled out
by 2020 in Europe, and more all-wheel-drive and four-wheel-drive models will
also hit showrooms in the coming years.
In relation to its bottom line, Ford of Europe returned to profit last year and
is targeting higher profit and pre-tax operating margin in 2016 as well as a
six-to-eight per cent long-term operating margin.
Ford said the closure of three manufacturing plants in Western Europe since
2013 and reaching a cost-saving agreement with German labour unions has helped,
and that the company will introduce new measures to further reduce costs.
A voluntary redundancy program to reduce administrative and selling costs is
expected to save Ford of Europe about $200 million a year, while manufacturing
improvements should also have an impact.
Ford plans to improve its brand image through new products, increased
“experiential marketing”, best-in-class dealer and customer experience and the
roll out of 500 new FordStores in major urban centres.
More revenue streams will be looked at through customer loyalty, as well as
transport, fleet and ride-sharing services.
Ford executive vice-president of Europe, Middle East and Africa Jim Farley said
the aim of the transformation plan was to ensure profitably regardless of the
“In the past three years, Ford of Europe has improved its business in all areas
and moved from deep losses to a $259 million profit in 2015. This is a good
first step,” he said. “We are absolutely committed to accelerating our
transformation, taking the necessary actions to create a vibrant business that’
s solidly profitable in both good times and down cycles.”