Ford’s European Turnaround Based on Product Launches
It’s no secret that Ford is struggling in Europe. It’s certainly not alone; GM, PSA Peugeot Citroen, Renault, and others are giving it plenty of company. Most of the struggles in Europe are found among mainstream automakers without a large global footprint. You’ll note that BMW and Daimler are not having problems, and in fact, are thriving. Volkswagen, too, with its immense scale, giant portfolio of brands, and ruthless efficiency is doing quite well as it gobbles market share from weaker competitors.
To fight through its troubles, Ford has announced several future products in Europe. If the strategy sounds like it’s similar to what the company has done elsewhere in the world (particularly in the U.S.), that’s because it is. “One Ford,” you know.
Most interestingly, the next-generation Mustang will be sold in Europe. The company has already said that it would drop the retro-themed styling in the next Mustang, and the car will have a design language similar to the Fusion/Mondeo. Not bad, if they can pull it off. The challenge with the neo-retro car designs popularized in some circles is that it’s hard to move beyond them, so Ford is taking its medicine in the next Mustang. That car will have independent rear suspension – something that made a brief appearance as a bolt-on unit in the later years of the previous-generation Cobra models, but is not available in the current Mustang in any of its numerous versions. Expect there to still be a V8 option, and likely an EcoBoost V6 and an EcoBoost four cylinder as well.
An updated version of the Canada-built, U.S.-sold Ford Edge will slot above the Kuga (which is known as the Escape in the New World). With an EcoBoost four available on the somewhat-heavy Edge, its mileage isn’t terrible, but it’s hard to see the Edge (which is very wide) being much more than a niche product in Europe. Maybe Ford will see fit to add a diesel option in the Edge for Europe, which would be a perfect application for one of them. And why not bring that diesel to North America if you’ve done the engineering work, right?
Finally, Ford will off the EcoSport subcompact crossover in Europe, slottingbelowthe compact Kuga. Based on the subcompact Fiesta platform, the EcoSport has been sold in Brazil since the 2004 model year, but is now breaking out of Latin America in its second generation. Powered by a 1.0 liter EcoBoost three cylinder that produces 118 horsepower and 125 lb-ft of torque, the EcoSport should have adequate power and decent mileage, coupled with utility and passenger space thanks to its vertical orientation. Of note, the EcoSport is the first global Ford model to be developed entirely in South America.
Speaking of the 1.0 liter EcoBoost three cylinder, that engine will find its way under the hood of the 2013 Modeo, which made its debut earlier in the week. Of course, the Mondeo is basically the same car as the North American Fusion, but with different options (including engine and body configurations) in Europe than in the States. Europeans get a five-door hatch, four door sedan, and (gasp) a
wagon estate. Europeans also get diesels, naturally. The 1.0 EB won’t find its way to the U.S., at least not yet, but it will be interesting to see how the car drives with that engine (which sounds a bit weak on paper, at least in EcoSport tune) and whether buyers will accept it or just check off the diesel box.
Selling more cars is one way to stem Ford’s Europe losses, which are predicted to be between $1 billion and $2 billion this year. However, that’s easier said than done when there’s a soverign debt crisis bubbling just under the surface in Europe, eroding consumer confidence to terribly low levels and encouraging potential car buyers to keep their wallets closed. The other thing Ford (and many of those other automakers struggling in Europe) needs to do is close a plant or two. With just 63 percent of its assembly plant capacity being utilized in Europe, Ford needs to both increase sales and cut some capacity if it hopes to crawl out of its hole there.
Though selling new cars against economic headwinds is tough, closing auto plants in Europe is possibly even tougher, though that’s clearly what is needed. European automakers who are struggling need only look at what right-sizing plant capaicity did for their peers in the US over the past few years.