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Edge SUV Will Help Raise Ford Image, Profit Margins In Europe

“Whilst the new Edge is likely to prove successful in the U.S. once more, it is the global opportunity which we find exciting”

Ford’s plan to sell its Edge SUV in Europe for the first time will enhance its image and boost the plan to return to profitability next year.

Ford Europe announced that it will sell the Edge here in 2015, and with the introduction of the storied Mustang sports car, this should help the company’s push to raise profit margins across the range.

Ford said will have to steal sales from SUVs like the Volvo XC60, Audi Q5, BMX X3 and Mercedes GLA.

The new Mondeo (Fusion in the U.S.) is also expected to go on sale next year, after a two year delay.

“We believe the Edge will be an important product in Europe,” said Arndt Ellinghorst, analyst with International Strategy and Investment.

“Whilst the new Edge is likely to prove successful in the U.S. once more, it is the global opportunity which we find exciting,” Ellinghorst said.

IHS Automotive said Ford will sell about 8,000 Edges in Europe in 2016

Ford said SUV’s are gaining ever greater market share in Europe, more than doubling to 21 per cent in 2013 from 10 per cent in 2008. Ford already sells a mid-size SUV, the Kuga, and the small, made-in-India EcoSport. By 2018 Ford said it expects to sell three times more SUVs in Europe than it does today.

“Ford’s global SUVs – small, medium and large – are driving the company’s growth in key markets around the world,” said Barb Samardzich, chief operating officer, Ford of Europe.

“We believe it is the right time to introduce a larger, more upscale SUV at the top of the Ford portfolio here in Europe,” she said.

ISI’s Ellinghorst said the Mustang will play an important role in lifting Ford’s brand positioning in Europe.

“These incremental models come in conjunction with the first full year of the all-new Mondeo as well as a facelift for the Focus (small sedan). And though yet to be confirmed, we also expect an all new S-Max and Galaxy (minivans) shortly,” he said.

“The Edge is one of several products which we believe, combined with significant restructuring actions and improvements in channel mix, will help Ford of Europe to return to profitability in 2015,” he said.

ISI forecasts a positive earnings swing at Ford Europe of $1.8 billion between 2013 and 2015, and a return to profit next year with $372 million.

Ford has removed 18 per cent of European capacity with the closure of a commercial vehicle plant in Britain and a car assembly plant in Genk, Belgium.

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