Ford's Farley feels the squeeze in Europe's middle
Ford of Europe CEO Jim Farley hopes car buyers in the region will choose the Edge large SUV over comparable models from premium brands
The squeeze in the middle of the European car market is getting worse for volume automakers, Ford of Europe CEO Jim Farley says, but he's confident the automaker has the right solution to the problem.
“Luxury brands are now in all the key volume segments, and the number of the value brands is growing so the traditional space for the mainstream brands is not as big as it used to be. We're seeing customers cross shop all sorts of brands,” Farley told journalists on the sidelines of the Geneva auto show last week.
That means a Ford Focus has to compete against a everything from a BMW 1 series on the high end, an Opel Astra in the middle and a Dacia Duster on low end of the market.
The squeeze from above from models such as the Audi A6 wiped out Europe's volume large-car segment years ago and demand for models such as the Audi A4 and Mercedes-Benz C class has left just a handful of mass-market competitors in the midsize class. While Ford is currently rolling out its newest midsize Mondeo in Europe, Honda recently announced it will pull out of the segment because of weak sales of the Accord.
Farley said Ford also is struggling to compete with premium brands on price. Higher resale values of cars from Audi, Mercedes and BMW mean that those brands can offer financing rates that match or beat Ford's deals. With customers increasingly comparing the monthly payment figure rather than the overall sticker price, Ford, Opel, Peugeot and other mid-market players are at a disadvantage.
Ford's solution to the “new dynamic” is to offer cars that it hopes consumers will choose over comparable models from premium brands. Examples include U.S. imports such as the good-looking Edge large SUV and newly economical Mustang muscle car as well as Europe-made high-performance variants such as the Focus RS. “Customers will find the RS compelling compared to the luxury brands,” Farley said.
This year, Ford also will debut its top-of-the-line Vignale trim level. The Mondeo will be the first Ford to offer variants with Vignale's upscale features, followed by the S-Max large minivan. Ford hopes the deeper model portfolio and the heavy emphasis on moving upmarket will help the brand return to profitability in Europe after years of big financial loses.
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