Despite Mounting Losses, Ford Motor Company Continues to Make Progress in Europe

Looking at Ford Motor Company's bottom-line results, it's clear that the automaker's operations in Europe have been nothing short of a failure. That's even more apparent when you realize Ford's losses in the region since the beginning of 2012 total nearly $4 billion.

Despite this, and the fact that Ford no longer expects to break evenin 2015 as previously thought, there are some bright spots for investors to keep in mind as we start the new year.

How 2014 wrapped up With the book closed on Ford's 2014 in Europe, let's take a look at how sales finished up and what the automaker has planned for 2015. Despite continued profit struggles, Ford of Europe increased sales and gained market share last year due to strong demand surrounding its new cars. Ford's sales in Europe totaled 1.16 million in its traditional 20 European markets, which was a 7.3% improvement over 2013.

Those figures were strong enough to secure Ford as Europe's No. 2 best-selling brand. Much of that success is pinned on Ford's Fiesta, which posted a 5% sales increase and will be Europe's best-selling small car for the third consecutive year.

Beyond the Fiesta and Focus, which, as you can see below, represent 45% of Ford's sales in Europe, more than half of Ford's vehicles sold in the region last year were all-new or significantly refreshed vehicles -- something that should enable Ford to continue capturing market share, despite profitability struggles.

Graph by author. Data source: Ford Motor Company.

Ford is also focusing on a more profitable sales mix, which will help the automaker's operations turn a profit more quickly. Ford has continued to emphasize sales to retail buyers and fleet customers, rather than daily rental or dealer registration customers. The latter two are sales that are typically negative for brand image and residual vehicle values. In 2014, 74% of Ford's sales were generated from more profitable retail and fleet customers, which is a healthy 300 basis points better than the industry average.

While Ford's operations in Europe didn't produce ideal bottom-line results for investors, clear progress has been made. Here are a couple of tricks up Ford's sleeve for 2015 that will further the automaker's progress in its most troubled region.

The road ahead 2015 looks like it will be one of Ford's busiest years in Europe in terms of new vehicles. An all-new Galaxy seven-passenger vehicle will debut midyear, as well as Ford's all-new S-MAX, C-MAX, Grand C-MAX, Mustang, and Edge, among others. There will also be refreshed EcoSport, Ranger, Transit Connect, and Tourneo Connect designs.

However, perhaps the most intriguing development for Ford investors in Europe will be the automaker's Vignale product. Ford Vignale is designed to attract a more upscale consumer through premium vehicle options, some typically only found on luxury vehicles, and a more upscale experience with the "Vignale Lounge"at Milan Design Week in 2014.It's a move that makes sense because Ford needs the higher transaction prices and fatter margins associated with luxury vehicles, yet Ford's luxury Lincoln lineup would find it difficult to compete with European luxury brands on their home turf. Vignale will enable Ford to find a sweet spot between the price points of mainstream and luxury vehicles, which will help improve transaction prices and margins.

Ford still has a long road to go before it turns a profit in Europe, but when the automaker finally reaches the light at the end of that tunnel, it will be in much better shape because of its continued focus on rolling out new models, improving to a richer sales mix, and finding a more premium price point through its Vignale products.

The article Despite Mounting Losses, Ford Motor Company Continues to Make Progress in Europe originally appeared on Fool.com.

Daniel Miller owns shares of Ford. The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.