Sales Highlights

In 2008, auto sales around the world declined significantly as a result of the growing global recession and credit crisis. Even though our overall sales, like the rest of the industry's, were down in 2008, we made some important strides in sales, product introductions and product investments in both mature and emerging markets.

United States

In the United States, we are introducing highly desirable vehicles in the fastest-growing segments, including crossovers and more fuel-efficient vehicles. In 2008, we committed that every new or significantly redesigned vehicle we introduce will be best in class or among the leaders in their segments for fuel economy. We are meeting this goal by introducing more fuel-efficient gas engines, smaller vehicles and hybrid vehicles.

We are also introducing new products faster: By the end of 2008, we introduced new or significantly upgraded models of 70 percent of the Ford, Lincoln and Mercury products (by volume) sold in North America. By the end of 2010, 100 percent will be new or significantly upgraded.

Though auto sales across the industry declined in 2008 due to the recession and financial crisis, Ford, Lincoln and Mercury brands actually gained retail market share in the United States for two consecutive quarters, from October 2008 through March 2009. This gain was led by strong sales of the Ford Fusion midsize sedan and the new 2009 Ford F-150 pickup. The Ford Escape and Mercury Mariner small SUVs and the Lincoln MKS luxury sedan also contributed to Ford's market share increase.

U.S. Product Sales by Segment

Ford of Europe

Even in 2008's difficult economic conditions, Ford realized market share gains in 15 out of 19 primary European markets.1 In 2008, total market share in these 19 European markets was 8.6 percent (up 0.1 percentage point from 2007). Though overall sales decreased by 115,200 units in 2008 compared to 2007, Ford sales decreased by a smaller percentage (7.4 percent) than overall auto industry sales (8.3 percent). Furthermore, Ford realized sales gains in 10 out of the 19 primary European markets. In 2009, we are continuing to gain market share in Europe: In the first quarter of 2009, Ford's market share increased to 9.4 percent, its highest level in nearly 10 years.

In 2008, Ford was the bestselling brand in the UK and Ireland and was the second-bestselling vehicle brand in our European markets overall. Ford also regained its position of having the bestselling brand of passenger car in Spain. These results were led by the new Ford Fiesta and the continued popularity of the Ford Focus. Since the Fiesta's European market launch in August 2008, we have sold nearly 117,000 units. The Fiesta was the bestselling car in Europe in March 2009. As of that same month, the Fiesta was also the bestselling vehicle in the UK since it went on sale. In January 2009, the Fiesta received the "Car of the Year" award from What Car? magazine, the UK's leading source of new-car advice. In 2008, the Ford Focus remained the bestselling Ford car in Europe. With additional new models being launched in 2008, we are optimistic that we will maintain our sales momentum in Europe.

In 2008, Ford's share of the Turkish market decreased by 2.1 percentage points to 14.7 percent, but 2008 was still the seventh year in a row that the Ford brand led the market in sales in Turkey. We also are experiencing strong sales in Russia, where sales of Ford-brand vehicles increased by 6 percent to approximately 187,000 units in 2008.

Asia Pacific

The fastest-growing markets for automobiles are in rapidly developing countries like China and India. We are expanding our production capacity in China, India, Thailand and the rest of Asia, as well as launching new products in these and other markets to meet consumer needs and remain competitive.

Australia, China, India, South Africa and Taiwan are our principal markets in the Asia Pacific region.

Our wholesales in the Asia Pacific region and Africa were down 13 percent in 2008, reflecting a slowdown in industry sales during the second half of the year and adverse segmentation, primarily in Australia.

In 2008, our sales in China totaled more than 306,300 units. This sales figure includes vehicles produced and distributed by our two Chinese joint ventures: Changan Ford Mazda Automobile Corporation, Ltd. (CFMA) and Jiangling Motors Corporation, Ltd. (JMC). The CFMA joint venture, based in Chongqing, began production in 2003 and now builds Ford, Volvo and Mazda models. The JMC joint venture, which has operations in Nanchang, assembles light commercial vehicles for distribution in China.

We are continuing to increase our presence in China, with more investment in manufacturing capacity, the introduction of new products and the expansion of distribution channels. In 2008, we introduced several new models in China, including the significantly upgraded Ford Focus, the new five-seater Ford S-MAX, a refreshed Ford Transit and the Ford Mondeo. We began producing the new Ford Fiesta for the Chinese market in January of 2009 at CFMA's Nanjing plant. The Nanjing facility is the first to build the four-door version of the Fiesta.

In 2008, the CFMA wholesaled 204,334 vehicles. The CFMA's Chongqing plant has production capacity of about 250,000 units per year. We opened a second assembly plant and a new engine plant in Nanjing in 2007, with initial capacity of about 160,000 units annually, boosting our total annual passenger car production capacity in China to more than 410,000 vehicles.

In India, we continue to expand production capacity and new vehicle introductions. We are in the process of significantly increasing our presence in India with more investment in manufacturing capacity. In January 2008, we announced an investment of $500 million to expand our current manufacturing facility in Chennai, in order to build a fully integrated and flexible engine manufacturing plant that will begin production of a new small car by 2010.

Similarly, in Thailand we announced plans to invest more than $500 million in a new, highly flexible, small passenger car plant at AutoAlliance Thailand – a joint venture between Ford and Mazda. This facility will begin producing small cars in 2009; in 2010, it will begin producing the new Fiesta for other major Asian markets.

In the Philippines, we have extended our commitment to biofuels by launching the production of flexible fuel engines at our Santa Rosa facility.

South America

Ford is the fourth-largest automaker in South America, and our principal markets include Brazil, Argentina and Venezuela. Ford's 2008 market share for the region was 9.7 percent, down one percentage point from 2007.

We continue to launch new products to meet the needs of our South American customers. In 2009, we are bringing the new European-based Ford Focus to Brazil, Argentina and Venezuela, as well as bringing the North American-based Ford Edge and European-based Transit to Brazil. Four additional product introductions are planned for the region in 2009. We are also investing $1.1 billion in our Brazil operations and another $215 million in our Argentina operations over the next four years.

This sales growth in the rapidly growing markets of South America and Asia represents a significant achievement for the Company. At the same time, we know that our long-term success in these developing and revitalizing economies will depend on our offering new types of mobility solutions that are increasingly sustainable and tailored to the unique needs of these markets. Our sustainable mobility strategy is aimed at ensuring we do just that.