Ford Motor Co. (NYSE: F) announced today that sales in its 19 traditional western European markets fell by -16.1% in June and by -10.3% for the first half of 2012. The drop in June sales was attributed to the company’s refusal to drop prices to match “heavy competitor discounting.”
The overall market for new cars in Europe during the first half of the year was at its lowest level since 1994 according to the company, and Ford ranked 2nd in its traditional markets. General Motors Co. (NYSE: GM) has not yet released comparable figures for Europe.
Ford has sold 617,600 new cars in its traditional European markets through the first six months of 2012, nearly 71,000 fewer than in the first half of last year. Ford’s first-half market share totaled nearly 8.1%, down -0.3% from last year.
Total auto sales in Europe were down -7.1% for the first six months of the year, so Ford’s drop exceeded the industry average by a significant amount. Refusing to offer discounts clearly cost the company:
The economic environment remains very difficult, obviously, and we are balancing the need to be price competitive, while remaining committed to improving net pricing, building brand strength and protecting residual values.
That may be a sound strategy in a strong market, but it’s hard to characterize Europe as a strong market for anything these days. Ford expects new product introductions to help it gain momentum in the second half of the year and into 2013.
Defying the weak sales report, Ford shares are up about 1.5% at $9.27 in a 52-week range of $9.05-$13.44.