Ford to restructure European operations, drop unpopular models

Ford has outlined a restructuring plan for its European operations, aiming to further reinforce profits in 2016 and beyond.

The region posted its first annual profit in 2015 after three years of losses on the continent. A 10-percent sales increase brought Ford’s European financials back into the black, while elevating the Blue Oval to claim the title of best-selling commercial vehicle brand.

“In the past three years, Ford of Europe has improved its business in all areas and moved from deep losses to a $259 million profit in 2015,” said Ford Europe executive vice president Jim Farley. “We are absolutely committed to accelerating our transformation, taking the necessary actions to create a vibrant business that’s solidly profitable in both good times and down cycles.”

The automaker already closed three manufacturing facilities in Western Europe since 2013 to trim costs. The latest strategy involves a voluntary separation program, potentially saving another $200 million annually.

Perhaps most importantly, the company plans to eliminate “less profitable vehicles” from its European lineup in the coming years. The trimming will not affect launch plans for seven new or refreshed models this year, ranging from the Focus RS to the Kuga and Edge SUVs.

“SUVs remain Europe’s fastest-growing market segment, and Ford expects to surpass 200,000 SUV sales in Europe for the first time in 2016 – a growth of more than 30 percent compared with 2015,” the restructuring statement notes.

The company also plans to expand its ‘Vignale‘ luxury sub-brand, starting with the Mondeo before adding the S-Max and three other models by 2017. Performance cars will also be maintained as the Mustang completes its first year of availability in the region. At the other end of the spectrum, new plug-in hybrid and pure electric vehicles will arrive before the end of the decade.

“We are creating a more exciting and distinctive Ford line-up in Europe,” Farley added. “When we play to our strengths, we can compete and win in Europe – even against premium brands.”