Marketing key for Ford in Europe

05 November 2012

COLOGNE: Ford, the automaker, is placing a renewed emphasis on branding and advertising as part of its efforts to return to profitability in Europe by the middle of the decade.

Robert Shanks, Ford's chief financial officer, said it would pursue an "aggressive new product rollout" in Europe over the next five years, launching 15 vehicles containing a range of "smart technologies".

The goal, he told analysts, is to achieve "an unprecedented product and technology acceleration delivering a model line-up that will be among the freshest in the region."

"In the environment that we are in," Franks continued, "we're ... spending hardly anything on advertising and sales promotion. And with the expanded portfolio that we are going to be putting into place, we clearly want to communicate that."

As an indication of the challenges facing the company, it predicted that European pre-tax losses for 2012 would hit $1.5bn. It registered a regional loss of $468m in the last quarter alone.

This can be compared with a profit of $1.8bn from its automotive operations during this period, as North America, Asia Pacific, Africa and Latin America all yielded positive figures.

Similarly, Ford's market share in the 19 European markets it tracks stood at 7.8% by the end of the third quarter, down from 8.5% on an annual basis, a metric the firm is seeking to drive up.

"We do expect the share to grow. In fact, this is a growth plan for Europe not only because we expect the industry to come back, but we expect to grow our share," said Shanks.

In facilitating this process, Ford is to focus on the retail and commercial channels rather than lower margin categories like rentals and demo sales. "We expect the mix of the share to change," said Shanks.

As the sector begins to recover, it is also probable that discounting will "peel back a bit from where it is today", Franks suggested, helping the company generate higher margins than at present.

Data sourced from Seeking Alpha; additional content by Warc staff