Ford of Europe reports big profits in the second quarter, despite a steady decline in sales

Ford of Europe has reported a big rise in quarterly profits, despite a steady decline in sales during the same period.

The division made a second-quarter pre-tax operating profit of $322 million (£209.5 million), up from $57 million (£37 million) during the same period last year. The result is well above the $107 million (£69.6 million) profit the European unit made in the first quarter.

However, Ford of Europe's sales fell for the third-consecutive month in June, down 8.3 per cent to 118,800 units.

The increase against 2009 has come from greater market stability; Ford of Europe said it had spent much less rescuing suppliers this year. In 2009, car makers were forced to bailout or, in some cases, buy suppliers to ensure that parts deliveries would not be interrupted.

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23 July 2010

Good news for Ford!

This is only part of the story though, Ford made $2.6billion Worldwide in the 2nd quarter of this year. I wish Autocar would report the whole story!

23 July 2010

Not entirely good news for Ford. Similar results from Fiat, where there is a return to profitability but a fall in market share and sales. Cost cutting and easier market conditions are helping most suppliers now but someone is picking up the sales as GM, Fiat, Ford and others fall away. I would expect VAG to produce some powerful figures

23 July 2010

[quote crashbangwallop] I would expect VAG to produce some powerful figures[/quote]

mate, Daimler AG did - €2.1bn PBIT, Q2 2010, about a week ago, but it went entirely unreported on Autocar. imagine that! but you're right, Ford's in schtuck. the Fiesta sales are down massively in Germany, post scrappage, and the new Focus is still almost a year off before on-sale. any profits have come from cost paring.

23 July 2010

Sales are down, but thats partly because Ford has changed its priorities. Since Alan Mulally (the CEO) came to Ford in 2006 one of his first moves was to match production with demand, so they dont over supply and then have to discount heavily to sell. This is not only in Europe, but Worldwide, they are also aiming for profitablilty not just market share.

23 July 2010

[quote dutchmaestro]any profits have come from cost paring[/quote]

I'm sure that is part of it, but remember Ford also massively increased their prices in the winter, and only recently started lowering them again.

Autocar - is there any analysis on from where the profits came?

23 July 2010

[quote Focus ST]Sales are down, but thats partly because Ford has changed its priorities. Since Alan Mulally (the CEO) came to Ford in 2006 one of his first moves was to match production with demand, so they dont over supply and then have to discount heavily to sell. This is not only in Europe, but Worldwide, they are also aiming for profitablilty not just market share.

[/quote]

yeah, right. Ford US is doing well cos Yanks think Ford is cool, because it took no govt. handout and they view Ford Product, like the new Fiesta and coming Focus, almost as premium, in comparison to the GM Chevy and Chrysler crap. In Europe Europeans view Ford as... different to the Yanks let's say.

Fiesta sales are down 50% in Germany for first-half 2010 compared to '09. Fiesta sales in June were down 60%.

Ford sales as a whole in Germany are down 35% till the end of June compared to '09.

In Europe overall Ford sales were down 20% YoY in June and down 5% YTD.

Ford US/China and Ford Europe - two different animals.

23 July 2010

[quote dutchmaestro]Ford US is doing well cos Yanks think Ford is cool, because it took no govt. handout and they view Ford Product, like the new Fiesta and coming Focus, almost as premium, in comparison to the GM Chevy and Chrysler crap. In Europe Europeans view Ford as... different to the Yanks let's say.[/quote]

Yea true they have made sales because people have moved from GM and Chrysler to Ford, but in addition the newer line up of Ford's US vehicles are a lot better than they used to be. They now have industry leading technology in their US cars like the Ford sync systems, automatic trailer stability controls and class leading fuel efficiency etc. They also have the highest results for quality surveys from non-premium brands in the US. You can't say they have made a massive turnaround just because people have bought Ford's instead of other brands. There are several factors that have improved the profitablilty of the company, just look at the news ocassionally.

As for the sales being down you must consider that the scrappage schemes have finished and almost all sales are down, adding to that the initial increase (2009 sales) were very high because there was a build up of demand for the Fiesta because people held off for the new model. Now those people who wanted a new Fiesta have one, there will be a slow down.

More recently the European economic recovery has been set back due to the debts in certain southern EU states, so whos going to have more uncertainty regarding their future earning potential......lower-mid earners, who are likely to buy small cars like Fiestas.

23 July 2010

I have to be honest when Ford first said they were going after the premium sector rather than concentrating on old rivals GM i thought they were crazy!

I think they called it a 10 year plan at the time?

But its worked, i think that in many peoples eyes the Focus is comparable to the Golf and the Fiesta probably beats the Polo hands down.

The Mondeo, Kuga etc is bought by 3 series and A4 drivers not vectra or insgina.

Speaking to freinds at Ford dealers they are awash with prestige part exchanges

Ford deserve big respect for this, i cant think of another car company that has changed its fortunes with such dramatic effect.

so now they just have to keep it going...............

24 July 2010

I think Ford like many others sell well because their cars drive well but when it comes to the i want one factor they fall short.Mondeo and Focus extremely bland

24 July 2010

This isn't what European and UK sales figures are showing. Ford's share in Europe is dropping and its still seen as a sales reps vehichle. Below VW and no where near Audi or BMW. A different story in the US where sales are up and its image is good because unlike GM and Chrysler it didn't go into insolvency.

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