Ford wishes to increase profitability in Europe by including higher-margin variations of the Fiesta subcompact, its very popular local model, the automaker’s top European executive stated.
High-volume automakers such as Ford have for numerous years been squeezed in a downmarket growth by luxury competitors including Daimler’s Mercedes-Benz and Audi.
However Ford, which presently targets premium purchasers with higher-end variations of a few of its larger vehicles under the Vignale label, now wants to take additional benefit of that opportunity as well.
The next-generation Fiesta, revealed late on Tuesday in front of 2,500 staff, dealerships and press reporters at its Cologne plant, will include sophisticated safety features and cater to more customers with brand-new crossover and upscale variants.
“Having that type of special feeling in a mainstream product is where the market is going and where Ford as a brand needs to go to generate income in Europe,” Ford Europe CEO Jim Farley informed Reuters. “We don’t want to build commodities any longer.”
However Farley refused to say exactly what contribution to profitability the brand-new Carnival may make. Ford has sold over 17 million Fiestas worldwide since the first variation came to market in 1976.
Taking advantage of expenses cuts and growing sales of higher-margin SUVs, Ford may increase earnings in Europe to around $1 billion this year, on a par with its nine-month gain in the region and up from $259 million last year, a representative told.
Farley noted a full-year profit aimed at $600 million had already been surpassed in June.
Ford has likewise positioned the 10,000-euro ($10,644.00) Ka+ city vehicle below the Carnival’s base model to target budget plan customers, Farley stated.
Yet it remains to be seen whether new offerings for the revamped Carnival and other models will provide Ford an edge in the congested European market.
Ford sales in Europe might decrease 5.2 percent to 1.4 million vehicles by 2025 from an approximated 1.47 million this year, compared to a 2 percent drop at General Motors’ Opel division to 1.14 million and a 4.6 percent gain to 2.16 million for the Volkswagen brand, as per IHS Markit.
Separately, Ford Chief Executive Mark Fields stated the automaker will start testing its self-driving lorries in Europe next year. Ford has stated it plans to provide a mass-market completely autonomous automobile by 2021.
