Why – and how – Ford must reinvent itself
Dismal losses in Europe are triggering a radical reinvention.
1 Embrace the problem
Operations specialist Stuart Rowley, who led Ford’s US turnaround, has ben parachuted in to help salvage the European division. It lost $398m in 2018, and Ford’s European market share has dived by 2.5 per cent since 2009. GM pulling out of the region has made the unthinkable thinkable – so it’s do-or-die with this radical plan.
2 Prune the dead wood
Loss-making cars such as the Ka+ and C-Max are being culled, and the Mondeo’s future looks bleak as the US won’t invest in new saloons. Options lists will be simplified, and customers lured into higher-margin trim lines STLine, Titanium and Vignale.
3 Yet more SUVs
Only one in five Euro Fords is an SUV. The Ecosport has better margins than a Fiesta, so Ford is doubling down with a new entrant in that space, the Puma. This small crossover, with curvy haunches, wraparound lamps and lots of interior space, goes on sale in early 2020.
4 Hybrids galore
Ford will introduce eight electrified cars this year, as it rolls out mild hybrids, ‘self-charging’ hybrids and plug-in hybrids. The new Kuga range includes all three. Its 2.0-litre diesel will be offered with a 48-volt electrical system to boost efficiency, while the PHEV mates a 2.5-litre petrol with an electric motor, for 29g/km of CO2 and 31 miles of zero-emission range.
5 Roll out EVs
Next year also brings a new battery electric vehicle to rival Jaguar’s i-Pace. The ‘Mustang-inspired’ crossover should offer a 370-mile range, better than anything currently on the market. All these electric cars are needed to help Ford meet its CO2 obligations, with big financial penalties for failure. ‘We will comply,’ president Rowley told CAR. He’s also looking into synergies from tapping Volkswagen’s electric-vehicle know-how.
6 The human cost
In Germany 5000 out of 23,000 jobs will go, and the UK’s 12,000 workforce will be pared back too. A transmission factory in Bordeaux will be shuttered, and Ford has bailed out of its passenger-car business in Russia. Brexit could yet cause a huge financial shock in Ford’s biggest European market.
7 Foreigners welcome
Ford will bring more imports into Europe, buoyed by the success of the Mustang, worth 10,000 lucrative sales a year, and Europe’s best-selling pick-up, the Ranger. Next up is the seven-seat Explorer SUV, a US mainstay since the ’90s. It gets a V6 plug-in hybrid for the mainland, but won’t reach the UK: the case for right-hand-drive doesn’t add up.
8 Vans and Volkswagen
While the European division posted a negative 1.3 per cent margin, Ford’s vans business makes double-digit profits. Turkey’s low-cost Transit facility should become even more profitable by making the Transporter van, as part of the Ford-VW alliance. And Ford is keen to stay ahead of the pack with plug-in Transit and Tourneo vans, vital for curbing city air pollution. Ford is Europe’s number one for vans – the rest of the business needs to catch up fast.