Ford at 8% share, down almost a percent compared to last January, is fighting to stay in fourth place.
Ford Motor Company sales in Europe were flat in January at 114,100 vehicles. The mixed result came from rising sales in Eastern Europe, Russia and Turkey offsetting what was another decline in Ford’s traditional 19 Western European markets.
At month end, Ford market share dropped slightly in all 51 European countries to an estimated 8.2%, a reduction of 0.2 percentage points from January 2010. Ford’s total vehicle share was 8.3%, or 0.5% lower than in January 2010, the company said today in a preemptive release ahead of official results tomorrow from ACEA, the automakers’ trade group in Europe.
Ford management now appears caught by two long overlooked macro-economic trends that are largely beyond short term control – the collapse of Western European economies where Ford is a major player, and the growth of India and China, where Ford is a minor factor.
Ford Motor common stock suffered late in January by dropping 13% on the day when Ford reported 2010 net income of $6.6 Billion – far below analyst expectations of $8 billion – because of declining fourth quarter results, which were largely the results of a loss in Europe, increased global launch costs and a $960 million charge for converting debt to equity.
Ford did not signal the change in its outlook from a profit to a loss in Europe to the dismay and evident dissatisfaction of investors. Ford common stock closed today on the NYSE at just over $16 a share.
The European vehicle market declined 5.5% in 2010. The Renault Group stood out for its 4.4% improvement. BMW and Nissan, albeit on much smaller sales bases (725,000 and 390,000 respectively) also showed percentage gains of 5.7% and 9.9%, which sound more significant than they were in actual numbers.
As to the losers in 2010, Fiat Group and Ford stand out for large drops of 17% and 14% respectively. Each lost the equivalent in sales of the output of a final assembly plant. GM group also dropped 8% with all brands declining – Opel/Vauxhall, Chevrolet and of course the now Chinese owned Saab.
Europe is particularly problematic for General Motor’s Opel subsidiary, Ford Motor Company, and Fiat, the owner of Chrysler. The financial performances of all are being hurt by terrible results in Western Europe.
Volkswagen Group retained its dominant European market share in 2010 at 21.2%, or 2.8m vehicles. VW’s share was followed by :
2. PSA Group with a 13.5%, 1.8m
3. Renault Group at 10.4%, 1.4m
4. GM at 8.7%, 1.2m
5. Ford at 8.1%, 1.1m
6. Fiat at 7.7%, 1m
7. BMW Group at 5.4%, 0.73m
8. Daimler at 4.9%, 0.7m
“Turkey had a great month – the best in more than a decade – with sales more than doubled, while Eastern Europe and Russia also showed very healthy sales growth in January,” said Roelant de Waard, vice president, Marketing, Sales and Service, Ford of Europe.
“Despite a small decline overall in Western Europe, I’m very pleased that our share was up in several markets, including the important large markets of Germany and Britain,” he said.
Several issues face Ford before it returns to financial health: Ford needs to pay down remaining debt of more than $16 billion, increase funding of underfunded pension plans, turn around its lackluster European sales, increase its presence in India and China, and successfully negotiate a new contract with the United Auto Workers Union this year.
