Ford of Europe CEO Stephen Odell is having a very different conversation with his car retailers. "Now dealers are asking us for cars," he said. In the past, dealers complained that they had too much product to move off their lots.
The reason for the change is that Ford of Europe has trimmed its inventory to 38-day supply of unsold vehicles compared with a 48- to 50-day supply a couple years ago and 65 to 70 days' supply in 2008 and 2009.
"We're not going to produce more than the dealers can handle," Odell told me at the Geneva auto show earlier this month.
Matching production capacity with the region's new level of demand is key to making Ford's European unit profitable again by 2015.
Through two months, Ford's European sales are up 10 percent to 126,033 vehicles and its market share has risen to 6.8 percent from 6.5 percent, according to data from industry association ACEA.
When asked whether the volume increase might allow Ford of Europe to return to profit a year ahead of schedule Odell said: "I like to deliver and then talk about it."
It will be very difficult for Ford to beat its profitability deadline. It expects to be hit by $800 million in restructuring and personnel costs as it closes its factory in Genk, Belgium, and moves that production elsewhere.
Ford also anticipates higher launch and engineering costs this year as a result of its plan to add at least 25 new or updated vehicles within five years.