America’s second-largest car company Ford has a ‘China Problem’ in Europe. And the problem is reportedly so big that CEO Jim Farley recently told journalists in Paris, “We know we’re in a fight for our lives in our industry, and no better example than here in Europe.” Ford CEO Farley made the comments as the company seeks to reboot its European business faced with upheaval being caused by Chinese automakers outside the US.
Competition has been quite fierce in Europe among auto companies as Chinese companies led by SAIC Motor and BYD have burst onto the scene with low-cost technology. The market share of Chinese producers jumped collectively to around 6.7 per cent of the European market in the third quarter, according to Schmidt Automotive Research.
Partnering to reboot Europe business
According to a report in Wall Street Journal (WSJ), Ford is now turning to French peer Renault to help reboot its European business. Renault will reportedly make two small electric vehicles for the pioneer of car production, the companies said. The partners are also said to be exploring how they might work together on vans, which form the core of Ford’s European business. The first of the next-generation EVs — to be designed by Ford, co-developed by both companies on a Renault technology platform — will reach European dealerships in 2028. The EVs will be built by Renault in northern France. Partnering with Renault marks a fresh start for Ford in Europe after years of downsizing and restructuring. In 2024, Ford said it would cut 4,000 roles, centered in Germany. In September, it announced a further 1,000 job losses. “We’ve been through many restructurings, and a lot of hard work. GM left. We decided to stay,” said Farley in summation of the company’s recent history in Europe. General Motors sold its European business in 2017.
“As an American company, we see Europe as the frontline in the global transformation of our industry,” said Farley in a statement. “How we compete here — how we innovate, partner, and invest — will write the playbook for the next generation. We are committed to a vibrant future in Europe, but that future requires us to move with greater speed and efficiency than ever before.”
Why not get US model to Europe
As to why Renault, Ford CEO admitted that the company has been working on its own EV platform in the U.S. as part of its so-called skunk works project. But that platform would be too big and expensive to work in Europe, “Frankly, Renault is more competitive,” he said.
Incidentally, Ford has a mixed record of forming partnerships in Europe. Its existing loss-making Explorer and Capri EVs are built in Ford’s factory in Cologne, Germany, using Volkswagen’s EV technology. As for Ford and Renault buying stakes in each other? Ford CEO Farley is quoted by WSJ, “Ford is a wildly independent company.”
