Ford Pushes New Models Over Rentals for European Revival

Ford Motor Co. is counting on new models such as the EcoSport compact sport-utility vehicle to help reduce reliance on low-margin sales to rental-car companies in Europe to stem losses in the region.

Ford plans to lower its share of deliveries to rental fleets to less than the European industry’s 13 percent average by early 2015 from 17 percent now, Roelant de Waard, the U.S. company’s head of sales for the region, said in a telephone interview. The carmaker plans to continue boosting the proportion of sales to retail and company-fleet buyers, which typically order cars at higher prices.

Ford is in the midst of an overhaul of its model lineup, which will include a redesigned Mondeo mid-size sedan by late next year, when the company foresees the European market beginning to rebound from a six-year slump. The Dearborn, Michigan-based automaker forecasts losses in the region will widen to about $2 billion this year from $1.75 billion in 2012.

“We’re expecting some improvement next year” in industrywide demand, de Waard said from Ford’s European headquarters in Cologne, Germany. He forecast that sales in Ford’s main markets in the region will rise to about 14 million vehicles in 2014 from roughly 13.5 million this year.

Ford rose 1.2 percent to $15.55 at the close in New York. The shares have gained 20 percent this year, topping a 15 percent increase in the Standard & Poor’s 500 Index.

May’s Deliveries

In May, Ford’s deliveries fell 2.2 percent to 99,400 vehicles in 19 European markets stretching from Portugal to Finland. The decline, which was less than a 6.2 percent industrywide drop across the region, lifted the company’s market share in May to 8.3 percent, the highest level for the month since 2009, from 8 percent a year earlier, Ford said in a statement today.

“It’s fair to say that with the newness and the freshness of our model lineup that we expect growth” in Ford’s market share in Europe next year, De Waard said.

The European auto market is likely to remain at current levels through the rest of 2013, with stable or deteriorating pricing for the industry as competitors shift more vehicle sales to rental companies, De Waard said.

The proportion of Ford’s deliveries to retail buyers was slightly ahead of other European automakers through the first five months of 2013, and its share to fleet buyers is in line with the average, De Waard said. Ford’s rental sales mix has declined by 2 percentage points from 19 percent a year earlier. Its share of deliveries to dealers’ demonstration fleets shrank by 5 percentage points to 11 percent to trail the industry average of 18 percent.

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