Can Ford's Europe Strategy Finally Turn Losses Into Stability?

Ford’s F European business has been under pressure for the past few years. Passenger vehicle demand has been weak, electric vehicle (EV) adoption has moved slower than expected, and competition—especially from low-cost Chinese automakers—has intensified. According to the European Automobile Manufacturers' Association, Ford’s sales in Europe fell 17% in 2024, reflecting a shrinking model lineup, tough economic conditions and softer consumer spending.

That strain forced Ford to make hard calls. The company announced job cuts and plant closures as part of a broader restructuring aimed at reducing costs and narrowing its focus. Market share in Europe remains a challenge, with the business running at a loss. Still, what’s notable is that Ford hasn’t chosen the easy exit.

Unlike its arch rival General Motors GM, which sold Opel and Vauxhall to PSA (now Stellantis) in 2017 and largely exited Europe after years of losses, Ford is sticking around. After more than 100 years in the region, Ford believes Europe still matters—both strategically and financially—if the business is reshaped the right way.

A Three-Pillar Reset Plan for Europe

First, the company wants to further strengthen Ford Pro, its commercial vehicle division, which is already the most profitable part of its European operations. Second, Ford plans to refresh its passenger vehicle lineup with more distinctive, multi-energy models. Third, it’s working to optimize its industrial footprint to drive scale and cost efficiency.

Ford Pro has moved beyond selling vans and trucks to offering a full ecosystem of software and services. Its Ford Liive Uptime system uses billions of vehicle data points to predict maintenance issues and reduce downtime. In 2024 alone, this translated into an estimated 820,000 additional days of vehicle uptime for European businesses—real, tangible value for customers.

Ford plans to introduce a range of affordable, multi-energy passenger cars and commercial vehicles designed to give customers flexibility. These vehicles are expected to reach showrooms in 2028 and should help make Ford more competitive in an increasingly crowded market. That said, execution risk remains high. Producing EVs at lower cost and higher volumes is critical, but Ford is effectively racing against China’s cost advantage and strong momentum in Europe. Ford’s success will hinge on how quickly it gets new vehicles to market and lowers costs.

Ford is also reshaping its manufacturing footprint to lower costs and streamline its EV supply chain. In the U.K., the Halewood plant now produces electric drive units following a £380 million investment, while Dagenham remains focused on advanced engine technology. Meanwhile, Ford’s Valencia plant in Spain continues to play a key role in future passenger vehicle production.

Partnerships Powering the Strategy

Ford is leaning on partnerships—something it has historically done well in Europe. In December, Ford announced a collaboration with Renault SA RNLSY to develop small, low-cost EVs for the region. Under the deal, two Ford-branded EVs will be built on Renault’s Ampere platform, with launches planned for 2028. The partnership also includes co-producing commercial vans, which aligns directly with Ford Pro’s strength.

This builds on Ford’s earlier alliances. Its joint venture with Turkey’s Koç Holding has been a major value driver for commercial vehicles, while collaboration with Volkswagen VWAGY has supported both passenger cars and vans. Ford’s current EVs from the Volkswagen alliance are produced at its Cologne EV Center in Germany.

Early Signs of Progress

Financially, the restructuring appears to be working. Per Automotive News Europe, as cited in Forbes, Ford’s European loss narrowed sharply to $52 million in the third quarter of 2025 from a loss of about $440 million a year earlier. That’s a meaningful improvement, even if the region isn’t profitable yet.

Ford Europe is still a work in progress, but the strategy is clearer and more disciplined now. If Ford Pro continues to deliver and partnerships help close the EV cost gap, Europe could shift from being a drag to a more stable contributor for Ford in the years to come.

The Zacks Rundown for Ford

Shares of F have gained 33% in the past year, outperforming the industry.

From a valuation standpoint, F trades at a forward price-to-sales ratio of 0.32, below the industry. It carries a Value Score of A.

See how the Zacks Consensus Estimate for Ford’s earnings has been revised over the past 90 days.

Ford currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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