KITZBUEHEL, Austria -- Ford Motor will use its American heritage to boost profitability in Europe as the automaker transitions to become an all-electric brand in the region.
Ford is dropping its long-running volume models, the Fiesta small car and Focus compact, in Europe to concentrate on SUVs, crossovers and pickups, which generate higher margins.
The automaker plans to launch three all-new, full-electric cars in the region in the next two years ahead of going all-electric at the end of the decade.
Ford sees these launches as a chance to revamp its marketing with a new slogan called "Adventurous Spirit," which it says stands for the American values of "freedom, outdoors and adventure."
"We are seizing the opportunity to completely reposition ourselves," said Ford's marketing chief in Germany, Christian Weingaertner.
"Our future models are more American, and from 2030 they will all be electric," Weingaertner told Automotive News Europe sister publication Automobilwoche at a press event here.
New marketing tags
Ford's models will be tied to new marketing claims. For its Mustang sports coupe, it will use "Wild Performance." Its Puma small crossover will be promoted with the "Urban Escape" tagline. The Explorer large crossover will be linked to "Active Adventure" while the Ranger pickup will be the "Ultimate Outdoor" vehicle.
Ford also said it will sell its Bronco midsize SUV in selected European markets starting in the spring. Its new Ranger Raptor pickup currently is being rolled out across the region.
Ford will stop building the Fiesta, a mainstay of its European lineup since 1976, next year at its plant in Cologne, Germany. The factory will switch to producing two full-electric cars based on Volkswagen Group's MEB platform, which underpins cars such as the VW ID3 and ID4 and Audi Q4 e-tron.
Customers who miss the Fiesta can switch to the Puma, Weingaertner said. Ford will launch an electric Puma, built in Romania, in 2024.
Ford will drop the Focus in 2025 after ending production of the car at its plant in Saarlouis, Germany.
Profitability struggles
Ford is the last truly competitive traditional U.S. brand in Europe, but in recent years it has struggled to be consistently profitable. In the third quarter the company swung to a $256 million profit in Europe from a loss in the same quarter the year before.
Ford faces tough competition from rivals including Volkswagen Group and Stellantis. With a similar product range to its competitors, Ford had a 4.7 percent share of the European passenger car market in the first 10 months, according to industry association ACEA.
VW Group's share was 24.6 percent and Stellantis had an 18.8 percent share, making them the No. 1 and No. 2 automakers in the region.
With their much higher market shares, VW and Stellantis have the advantage in purchasing and can therefore set their break even points lower than Ford.
Because of its smaller scale Ford faces higher costs but cannot price its models higher than the competition, limiting its profit margins.
Weingaertner said higher profitability is more important for Ford than selling volume models. With the new product and marketing strategy, "There is no more 'plain vanilla' with us," he said.
There is no contradiction between adventure and freedom on the one hand and electric mobility on the other, Weingaertner said. "Anyone who has driven a Mustang Mach-E or F-150 Lightning is convinced," he said.
Dealer shake-up
Ford's product realignment also means big changes for its retail network. For Ford dealers, less volume will mean less business.
The company will switch to the agency direct-sales model in Europe under which the manufacturer invoices customers directly and dealerships receive a fixed fee for the sale.
Ford's head of strategy, Joerg Ullrich, said at the Automobilwoche Congress in October that a single price for each model will simplify the system significantly. Costs also will be reduced under the agency retail model because fewer dealers and less retail space will be needed, he said.
