Ford to import India-made EcoSport crossover; key to European margins

By Deepa Seetharaman

GENEVA (Reuters) - Ford Motor Co will import its EcoSport compact crossover from India for the European market, where the vehicle will compete in a growing, but increasingly crowded segment, a top executive said on Tuesday.

The EcoSport, showcased at the Geneva car show, will be built in Ford's factory in Chennai, Stephen Odell, chief of Ford of Europe, said during a media roundtable. The vehicle will be launched in Europe in late 2013.

The EcoSport is a key part of Ford's strategy to hold its market share in Europe, where an economic downturn has sent vehicle sales tumbling. Ford is expanding its SUV lineup and aims to sell 1 million SUVs in Europe by 2017 or so.

"I've seen competitive models, some winning European car awards, launched at extremely high discounts," Odell said.

"There's clearly more margin in some segments than in others, which is why we think our new products enable us to get better retail share, which means better margins," he added.

The crossover segment, a rare growth spot in Europe, enjoys better profit margins than other models, which will help Ford's bottom line in years ahead. The EcoSport's rivals in the segment include Nissan Motor Co's Juke.

This vehicle strategy is one part of Ford's broad restructuring plan for Europe, which also calls for the closure of a major assembly plant in Genk, Belgium, and two smaller factories in Britain.

Ford also is aiming to hold its European market share this year, without discounting too deeply. But that may be difficult to do if the market deteriorates further.

"We are still predicting that our share will be broadly the same as our share last year," Odell said.

But, he added: "Share is interesting, but share doesn't pay the bills. You have to have a business that's profitable."

Odell said the European market is now "running along the bottom" of Ford's full-year forecast.

In January, Ford sales slumped 22 percent, worse than the 9 percent decline for the industry overall in 19 European countries, according to Ford data. The company also lost market share in many markets, including the United Kingdom.

Odell said Ford's lagging performance was due to the low availability of large sedans, model changeovers and Ford's push to sell more vehicles to consumers, rather than relying on fleet sales or demonstration models.

(Reporting by Deepa Seetharaman; Editing by Jeffrey Benkoe)