Just as the auto industry was picking up steam, America’s second-largest carmaker flopped in Europe.
Ford (NYSE: F) stock is down 5.7% in early trading today on news that the company reported a 21% drop in its European revenue. Though the automaker’s North American sales are much improved, Europe is one of Ford’s key markets. The Fiesta and Ford Focus are big sellers across the pond. Sales of those vehicles dipped to a 17-year low, according to the Financial Times.
Slower sales in Europe aren’t unique to Ford. With half the continent buried under a mountain of sovereign debt, consumers are tightening their belts all across Europe. Spending is down on a lot of luxury products – not just cars.
Things aren’t supposed to get much better this year. Ford is predicting a $2 billion pre-tax loss in its Europe business in 2013 – even worse than the $1.75 billion loss it suffered last year.
While Ford’s European sales picture is gloomy, its North American sales continue to brighten in the years after the auto bailout. North American sales were up 35% in 2012.
Overall, Ford suffered a $5.66 billion loss last year. But that was an improvement from the $20 billion hit the company took in 2011.
Business is steadily improving at Ford. But Europe remains a major problem area. That could keep Ford stock in check for the foreseeable future.