As the brakes come off a troubled mainstream European car market, Ford and General Motors jealously guard market share, but at what cost?
The post crunch era has been tough for America’s European automotive outposts. Of the pair, Ford appears in better shape, having already taken painful steps to arrest serious overcapacity in their European operations by shutting loss-making plants. The closure of the Genk plant only partially explains why the US Fusion took so long to become the European Mondeo. Last year, we suggested Ford had waited too long to launch its new mid-ranger and did so with a design that appeared a little too reminiscent of the outgoing one. Having lost almost 50% of its market in 2014, the (not quite) new Mondeo had it all to do in 2015. How has it fared?
Not too shabbily – sales for the new model showing a marked recovery aided by rising demand in formerly austerity ridden markets like Italy, Spain and Ireland. 2015 saw the Mondeo post deliveries of 79,673*, a 75% increase over the previous year**. Ford had a decent year in Europe, aided by a booming UK market. However, Britain is no longer a happy hunting ground for the D-segment, the German prestige brands maintaining an unassailable stranglehold on the sector.
So while the Mondeo reversed 2014’s sales collapse, its numbers still lag well behind arch-rival Opel’s still remarkably resilient Insignia, a car launched as long ago as 2008. Having sold 92,694 Insignias in 2014, last year’s sales remained steady at 88,544, maintaining GME’s lead over Ford. Less clear however is to what (if any) degree the figures have been massaged.
Another aspect the sales figures don’t tell us is how many Mondeos were sold in upmarket Vignale specification. Because if Ford can shift even a fairly modest number of luxury-trimmed Mondeos, Henry would be in a position to carve out a high-margin advantage over his Rüsselsheim rival.
Certainly, GM have yet to see much in the way of black ink on Opel’s balance sheet and the fear is that despite aiming for profitability in 2016, the obsession with market share is undermining gains made elsewhere. Certainly, it was disagreements over Opel management’s preference for sales volume over profitability that led to schisms between Rüsselsheim and Luton, culminating in UK MD, Tim Tozer’s resignation in September.
Nevertheless, Opel does appear to be on something of a product roll at the moment, with most of their range either brand new or significantly refreshed. Next year will see a new Insignia based on a lightweight platform, likely to further damage the Mondeo. Ford on the other hand appear tardy in their model plans, and with seemingly little of significance in the immediate offing, their European lineup lacks sparkle.
The Mondeo has staged something of a sales revival despite seen as being evolutionary, but for how long? And with mainstream European rivals fielding ever more up to date offerings, Ford faces a much tougher sales environment over the coming twenty four months, begging the question of how long they can protect it without resorting to incentives?
‘One Ford‘ has saved the Blue Oval $millions in development costs globally, but global models seem to have limited appeal for European customers. GM’s approach is more expensive, but seems to be giving them the volume, if not the profitability they crave. But with Henry becoming ever more US-centric, Ford looks in danger of gifting large swathes of the Euro market to its bitter US rival. Could there be a middle way?
*Figures sourced via ANDC/JATO dynamics/left-lane.com
Note: 2015 sales data have been modified to reflect full-year figures.