Ford of Europe: 5 reasons the automaker is failing

Puma’s small crossover shows that Ford can succeed in Europe with original design and sporty driving dynamics.
Ford is revisiting its business model in Europe to achieve sustainable profitability in the region.
The automaker is ditching the Focus compact sedan and Fiesta small hatchback as it moves towards a small lineup of all-electric passenger cars. He also cut thousands of jobs, many of them product developers, to accommodate the smaller European presence.
Ford CEO Jim Farley is trying to fix the problems caused by bad decisions ahead of his promotion to the top job in 2020.
Over the years, the automaker has made the smart decision to breathe new life into the European van market with the launch of the S-Max and Galaxy models. Then, in 2007, came the Kuga, a compact SUV perfectly suited to European tastes. But after that, the product pipeline narrowed and became weaker.
The B-Max minivan was introduced in 2012 when the segment was in decline. Launched in Europe in 2014, the Indian-made Ecosport compact crossover hasn’t made much of an impact in its segment. The subcompact Ka was replaced by the inexpensive Brazilian-made Ka+, but many buyers weren’t convinced.
The new model appears to be a temporary solution that cannot match the driving dynamics offered by the Focus and Fiesta in their respective segments. Driving pleasure is replaced by randomness.
In 2018, then-CEO Jim Hackett, who ran a U.S. office furniture maker, decided to scrap less profitable models, especially in Europe, and replace them with anything. Ecosport and B-Max are gone, as are S-Max and Galaxy.
Ford has exited several segments in a short period of time. The company attempted to fill this gap with extensive reconstruction of surviving models.
So the inevitable happened: Ford’s market share began to decline. This share decreased from 11.8% in 1994 to 8.2% in 2007 and to 4.8% in 2021.
The small Puma crossover launched in 2019 showed that Ford could do things differently. It was designed as a sports lifestyle vehicle, and it succeeded.
The Puma was the top-selling Ford passenger car model in Europe last year, with 132,000 units sold, according to Dataforce.
As a US public company, Ford is very focused on positive quarterly results. Investors prefer increasing profits over a promising long-term strategy that won’t pay off right away.
This environment shapes the decisions of all Ford CEOs. Ford’s quarterly earnings report for analysts and investors touted the idea that cost cutting and layoffs are hallmarks of shrewd management.
But automotive product cycles last for years, and tools and models are scrapped for years. In an age where skilled labor is in short supply, parting with the engineers who have accompanied the entire history of component development is especially fatal.
Ford plans to cut 1,000 jobs at its European development center in Cologne-Mekenich, which could again haunt the company. Battery electric vehicles require less development effort than combustion engine platforms, but internal innovation and value creation are needed more than ever during the industry’s transition to a software-driven electric model.
One of the main accusations against Ford’s decision makers is that they slept through the electrification process. When Europe’s first mass-produced all-electric Mitsubishi i-MiEV was unveiled at the 2009 Geneva Motor Show, Ford executives joined industry insiders to tease the car.
Ford believes it can meet tougher European emissions standards by improving the efficiency of internal combustion engines and the judicious adoption of hybrid technology. While Ford’s Advanced Engineering division had strong battery-electric and fuel-cell vehicle concepts many years ago, it stuck to them when rivals launched battery-electric models.
Here, too, Ford’s bosses’ desire to cut costs has been negatively affected. Work on new technologies is reduced, delayed or stopped in order to improve the bottom line in the short term.
To catch up, Ford signed an industrial partnership with Volkswagen in 2020 to use the VW MEB electrical architecture to support new Ford all-electric vehicles in Europe. The first model, a compact crossover based on the Volkswagen ID4, will go into production at Ford’s Cologne plant in the fall. It replaced the factory Fiesta.
The second model will be released next year. The program is huge: about 600,000 units of each model over about four years.
Although Ford is developing its own electric platform, it will not appear on the market until 2025. It was also developed not in Europe, but in the USA
Ford failed to uniquely position the brand in Europe. The Ford name is not a competitive advantage in Europe, but rather a disadvantage. This led the automaker to significant market discounts. His attempt to put his first electric vehicles on the road using Volkswagen technology did not help.
Ford’s marketing managers have recognized the problem and now see promoting the brand’s American heritage as a way to stand out in a bleak European market. “Spirit of Adventure” is the credo of the new brand.
The Bronco was sold in some European markets as a halo model, reflecting its “Spirit of Adventure” marketing slogan.
Whether this repositioning will lead to the expected shift in brand perception and value remains to be seen.
In addition, Stellantis’ Jeep brand is already firmly entrenched in the minds of Europeans as America’s champion of the adventurous outdoor lifestyle.
Ford has a dedicated, loyal and extensive dealer network in many European countries. This is a huge plus in an industry where branded and multi-brand dealerships are proliferating.
However, Ford never really encouraged this powerful dealer network to actually enter the new world of mobile products. Sure, Ford’s car sharing service was launched in 2013, but it hasn’t caught on and most dealerships use it to provide cars to customers while their own cars are serviced or repaired.
Last year, Ford offered a subscription service as an alternative to owning a car, but only at select dealerships. Spin’s electric scooter rental business was sold to German micromobility operator Tier Mobility last year.
Unlike its rivals Toyota and Renault, Ford is still a long way from the systematic development of mobile products in Europe.
It may not matter at the moment, but in the era of car-as-a-service, it could haunt Ford again in the future as competitors gain a foothold in this growing business segment.
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