Ford Authority

Ford Europe President On Bolstering Profitability

At the Geneva Motor Show, Ford Europe President Jim Farley was more than happy to detail some of the ways in which the regional division is attempting to secure its profitability. According to Automotive News, one of them is by restricting dealers from self-registering cars – a practice known in the US as “punching.”

“[Punching is] growing in the U.S., but it is a perfected art in Europe,” said Mr. Farley. “In some months in Germany, 20 to 30 percent of the industry is products sold to your own dealers that they register for you as a demo unit and sell as used cars.”

The practice of self-registering cars and then selling them as used vehicles at a reduced price is an unprofitable one for the automaker. Ford Europe has cut their share of dealer self-registered sales to just 4 percent, according to Farley. Ford Europe’s attempts to curb “punching,” in combination with efforts to limit sales to rental fleets, will help the European division to maintain a healthy operating margin.

In addition, Ford Europe is refocusing efforts on its more profitable segments – including crossovers/SUVs and commercial vehicles. Jim Farley reiterated that Ford will add as many as five CUVs and SUVs to its European lineup over the next five years. Conversely, Ford Europe will be slashing models in certain other, less-profitable segments to minimize losses. On this, Farley said only that the automaker had made “some very uncomfortable decisions” about future products.

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.

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