What Ford is Doing to Be More Competitive in Europe: An Interview With Jim Farley

Ford Motor Company is wrestling with an existential crisis. The automaker that once put the world on wheels is finding the automotive middle ground it once defined is being inexorably squeezed. Successful value brands such as Hyundai and Škoda are moving upmarket while brands such as Mercedes-Benz and BMW launch smaller products at Blue Oval price points. Ford, stuck in the middle, seemingly has nowhere to go.

Jim Farley thinks Europe might show the way out. The gravy days are long gone, but the U.S. is still a comfortable place for Ford Motor Company, thanks largely to the enduring dominance of the F-Series trucks. Winning the truck war Stateside doesn’t make Ford globally competitive, however. Full-size pickups are virtually impossible to sell outside North America.

Farley, who was made executive vice president and president of Europe, the Middle East, and Africa in January 2015, makes the point that while premium brands account for 9 to 10 percent of vehicle sales in the U.S., in Germany it’s 45 percent. “For Ford to learn to compete with the premium brands and do it in our own way is a real proof point for the capability of the company,” Farley says. That means choosing battlegrounds carefully. “We have to be selective with where we compete. We can’t be this brand with all this choice. We have to stop investing in nameplates where we have no line of sight for profit.”

Some Ford model lines will therefore disappear over the next few years, though Farley won’t say which. Ford sources suggest the Fiat 500-based Ka is one on the list, however.

Impressed with what Daimler has done with AMG, Farley wants to better leverage Ford’s ST and RS performance brands. “Our performance heritage is so strong, and we have real credibility,” he says. “I think it’s high time for us to give more people that experience.” And he thinks Ford can learn from vehicles such as the Citroën Cactus crossover. “In Europe the brands are not borrowing equity from a two-box SUV to create a crossover,” Farley points out. “They’re creating new imagery, and that is a very interesting global trend.”

But when a Mercedes-Benz costs the same as a well-equipped Fusion, why buy a Ford? Farley replies that 70 percent of Ford Kuga (Escape in the U.S.) sales are for the top-of-the-line Titanium model. “We surveyed those customers,” he says, “and a lot of them said they would like to buy something nicer from Ford.”

That something nicer is Vignale. Initially offered on the Mondeo (aka Fusion), Vignale, which among other things offers special paint, Bentley-quality leather, and VIP dealer service, has now been introduced on the Kuga, Edge, and S-Max. Only 2,000 Mondeo Vignales had been sold in the first four months, but Farley says 20 percent of buyers traded a premium brand vehicle to buy an ultra-luxe Ford.

Farley insists Vignale is not a Lincoln substitute. The concept will not be coming to the U.S., where Lincoln is again being revamped to take on luxury brands, and he says it doesn’t rule out Lincoln returning to Europe. But when it comes to premium, the Blue Oval is clearly hedging its bets.

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