FORD is launching a major pan-European initiative to improve the residual values of its model range and thereby reduce the wholelife cost of its cars.

Nick Scheele, chairman of Ford of Europe, highlighted this new focus on residual values as a key element of the manufacturer's plans to return to profit in Europe. In the past five years Ford has lost 25% of its European market share, and last year its factories operated at 71% of capacity.

'The only way out of this is to create product that the customer wants to buy and that sustains its residual value when he sells it,' said Scheele at the Automotive News Europe congress.

He emphasised the importance of rebuilding Ford's brand strength across Europe as the central element of improving the marque's residual values.

This will see Ford concentrate on the demand element of the used car market's supply/demand equation. By increasing demand for its used products, Ford believes it can improve its residual values and eventually increase supply.

The brand-building exercise will see Ford launch nine new products a year over the next five years, including 'segment-busters', to restore excitement to its brand. The manufacturer will also concentrate on creating a consistent theme to its European brand message, highlighting the durability and driving appeal of its vehicles.

Fleet News Europe also understands that Ford is planning new pan-European remarketing programmes, involving its dealers and the internet.

Residual values are the 'ultimate measure' of brand value, according to Wolfgang Reitzle, president of Ford's Premier Automotive Group (Aston Martin, Jaguar, Land Rover, Lincoln, and Volvo).

For him, the resale value of a car reflects its attractiveness, quality, reliability, image and dealer service, and he promised to defend the right of PAG manufacturers to protect their brand values by writing their own business independent of Ford. 'Corporate fleets sales are something where all the brands are involved, but Ford cannot make a deal for Volvo or Jaguar,' he said.

'We try to offer a group deal, but with conditions that each brand makes or you could dilute the brand.' (July 2000)