Cologne Three car plants in Europe are too many for Ford. The US car company has therefore decided to give up car production in Saarlouis in three years. Nevertheless, Martin Sander decided to switch from Audi to the Ford European headquarters in Cologne. He himself says that he wanted to leave the “comfort zone” of the Volkswagen Group in order to dare something new.
As the new European head of Ford’s electronics division, Martin Sander has had to completely reorganize the car business since the summer. Production is completely converted to electric models. From 2030 onwards, Ford intends to only sell purely battery-powered cars in Europe. Sander will reduce production and the model range. This also has an impact on the fleet business and dealer network.
“We will no longer return to the quantities from the pre-crisis years of 2016 or 2017,” says Ford’s European electrical boss in an interview with the Handelsblatt. The US car company needs a stable economic foundation in Europe and has to generate an adequate return with electric cars.
Ford dispenses with small cars
Reducing the model range is one of Sander’s central tasks in the context of electrification. “Our focus is on fewer, but high-volume, profitable segments,” says Sander, describing the basic idea.
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As early as next year, Ford in Cologne stopped producing the small car Fiesta, a combustion engine model. In the new electric era, there will be no substitute. When series production of electric cars begins at the Cologne headquarters in about a year, the entry-level model will be one step higher, in the so-called compact segment. With its new model strategy, Ford is following a common approach in the auto industry: the bigger the vehicle, the bigger the profit.
“Ford Europe could slip back into the red given the difficult macroeconomic development.” Patrick Hummel, UBS auto analyst
Sander hopes he won’t scare off loyal customers with this strategy. “We remain a brand with affordable cars,” emphasizes the new Cologne Ford boss. His company has no intention of becoming a premium manufacturer like BMW, Mercedes or Audi. Nor will Ford become a niche supplier, but will continue to see itself as a volume manufacturer in the future, albeit on a smaller scale.
Investors are skeptical. “Due to the difficult overall economic development, Ford Europe could slip back into the red,” warns UBS car analyst Patrick Hummel. In the third quarter of 2022, Ford’s European business remained positive. The main contributors to this were light commercial vehicles and less so cars.
Production in Cologne and Valencia
Ford will produce two new electric cars at the main plant from 2024. The European subsidiary of the American car group will initially use Volkswagen’s MEB electric platform for a model cycle that is expected to last six years.
The ID model series from VW is also manufactured with this electrical construction kit, which includes the complete drive and battery. Volkswagen is helping Ford to implement its European electric strategy more quickly. “Without the cooperation with VW, it would not have been possible at the speed now planned,” explains Sander.
In a few years, the second important electrical location is to be the Ford plant in Valencia, Spain. Which electric models will be produced there on which platform in the future is being discussed “especially internally very intensively,” says the Ford manager.
Martin Sander has been in charge of Ford’s European passenger car business since the summer. He is also the head of the German subsidiary.
(Photo: obs)
It is certain that Ford will probably use its own platform, most of which comes from the USA and is shared with the parent company. This should reduce production and development costs. According to the new model strategy, it is also clear “that this will not be a small car”.
The fleet business is of central importance for most car manufacturers. If rental car companies and large corporations regularly buy tens of thousands of vehicles, then the capacity utilization of the plants is largely secured. So far, this has also applied to Ford. But with the planned thinning out of the model range, the US subsidiary will no longer be able to fulfill all the wishes of rental car providers, for example. “We will continue to operate the fleet business, but on a smaller scale,” Martin Sander describes the consequences.
Dealer network will shrink
This has consequences for sales: “The number of dealers will decrease.” Dealers with a high fleet share would have to change their business model.
“We will continue to operate the fleet business, but on a smaller scale.” Martin Sander, Ford Europe boss
Ford wants to tie the car trade more closely to itself and control it itself. This includes the introduction of a Europe-wide agency system. The US car company wants to start with a pilot project next year in the Netherlands. If the new system proves its worth, it will be extended to all of Europe. As an agency, the dealers no longer sell the vehicles in their own name, but on behalf of Ford.
>> Read here, why the entire Ford group is splitting up into electric and combustion engine divisions
Ford will stick to the closure of vehicle production in Saarlouis announced in the summer. “We simply have too much capacity,” emphasizes Martin Sander. In 2025, the last example of the compact model Focus should roll off the assembly line there. The factory currently has around 5,000 employees. According to Sander, around 500 to 700 of these employees have a chance of continued employment.
Together with the Saarland state government, Ford is looking for investors who could use the factory premises. The group will continue to maintain part of it itself. A decision is expected to be made next year. The reuse of the former Opel plant in Bochum, which was closed in 2014, is a role model for the automotive industry. Several dozen companies are based there today, and there are more jobs than in the Opel days.
More: Ford adjusts the Fiesta in Cologne faster than planned