Ford Europe boss determines the plan to be fixed profit maker

Automotive News

Ford of Europe increased vehicle sales by 11 percent to 1.3 million vehicles in key markets, and completed in 2015 with the first operating profit in three years. Jim Farley, who began his second year as President Ford Europe on January 1, wants the division to be fixed profit contributor to the origin of the United States has. To do so Farley will be more selective in the sectors that are competing Ford. He is also determined to make Ford the leader of the movement in Europe. Farley shared his plans with auto Europe News editor Luca Ciferri, managing editor Douglas A. Bolduc and correspondent Christiane HETZNER.

Ford made money in Europe last year for the first time since 2011. Are you at the beginning of a long winning streak?

I do not think any executive wakes up in the morning and say, "I love to break-even point." We are here to provide a sustainable and vibrant business.

What kind of profit is not possible in the margins of Europe, given that most automakers did not address the issue of overcapacity in the region?

This is the question number (1) that I faced when I got my job. I think the answer is multi-faceted. The first thing is: Be careful where you can compete.

By leaving the less profitable sectors of Ford achieve above average profitability of industry in Europe?

Where you can compete is a matter of billion dollars for brands such as Ford in Europe. We have achieved great success through the SUV and commercial vehicles [] companies. We have great success with our products more emotional, such as our line performance ST. We encouraged so we have to challenge ourselves. Where you can compete and where you do not compete it is the most important between 2 percent and operating margin thing 5-7 percent.

Does this mean operating margin target is your 5% to 7%?

I'm just saying if I look at the companies current manufacturer, see Peugeot is in the 5 percent while many other automakers in the size of 2 percent. This group is 2% to 7%.

You can detect your goal?

As we told the world that we want the sidelines of 8 percent. To be a good investment for the company, we will have to be in this range.

What is the significance for Ford to be a leader of movement?

Leading role in the movement in Europe is the signature piece of our strategy to move forward. I have studied the market very carefully, I really believe there are a lot of opportunities.

What to expect in 2016?

What we are seeing in Europe is a continuation of modest growth. We see a really good strong growth in southern Europe for the first time since a long time. We believe that the overall market of 20 euros [Western and Eastern Europe] closes at about 16 million, and we really are going to have another big year.

What are some of the highlights for Ford in Europe last year?

It was a breakthrough year for us. We got No. 1 in commercial vehicles in Europe with a share of 12.6 CV percent [increase of 1.2 percentage points compared to 2014. The SUV we have as many as 31 percent in 2016 and is expected to grow by about 30 percent to break the 200,000 barrier for the first time

What are the hot spots in 2015?

Rental industry has grown. Business grew dealer demonstrator. We stayed out of those [low-margin] channels. It was about 74 percent of our sales, whether retail or the company's fleet, and that's about 3 points better than the industry.

Sales in Europe rose by 9% to 14.2 million last year. How much of that growth came from Ye low-margin channels?

I can not give you an exact figure but I think it came at least half of those channels. There are some markets in Europe, where retail sales have already shrunk. Germany was one.

Meet Europe coach
Name: Jim Farley
Address: Ford executive vice president. Head of Europe, Middle East and Africa
Age: 53
Main challenges: to promote unity and operating margin of up to 8 percent.

What is your outlook for the Russian market decline?

We fully believe the Russian market will come again. The middle class is still strong. The average customer age is very small.

How are you dealing with the recession?

We all adjust our costs. We are all looking for ways to use our in any way we can. We are all looking at what is best for the currency pricing strategy. This is one of the reasons why the profitability of EU20 [which excludes Russia, and this is very important. There are ups and downs in these markets. We want to make sure that companies are valid even when Russia is not due to the normal level and our brand flourish.

 

 

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