Sales Trends

While the overall sales trends for 2008 were gloomy, the progress we showed in the fourth quarter boosted our confidence that we are on the right path. In Europe, for example, we improved our fourth-quarter and full-year market share in the 19 markets that we track, becoming the No. 2 selling brand in Europe.

And in the United States, Ford, Lincoln and Mercury increased overall and retail market share in the last quarter of 2008 and first quarter of 2009 – the first time the brands have posted two consecutive quarters of market share improvements in years.

Based on end-of-year projections, we expect that our overall and our North American automotive business pre-tax results will break even or be profitable in 2011, excluding any special items.

More and more, consumers are also recognizing Ford vehicles for their quality and performance. The 2008 model year marked our fourth consecutive year of improved vehicle quality among noted third-party rating organizations. (See the Economy section for more on quality issues.)

There's no denying, however, that the economic environment will continue to impact global sales in 2009 and beyond. Vehicle demand has fallen so far, and in such a short period of time, that all manufacturers are reducing output, staffing and costs. In particular, industry sales volume in the U.S. and in the 19 European markets that we track declined suddenly and substantially in 2008 and continued at historically low levels into 2009. For full-year 2008, industry demand for cars and trucks in the United States fell to 13.5 million units, compared with 16.5 million units in 2007; in the 19 European markets, demand fell to 16.6 million units from 18.1 million in 2007.

To help boost consumers' buying confidence, we announced a sales incentive plan in March 2009 that includes guaranteed payment protection – up to $700 a month for a full year – for customers in the U.S. who lose their jobs after purchasing a new Ford, Lincoln or Mercury vehicle. The Ford Advantage Plan program was set to run from March 31 through June 1.

For more information on our restructuring and response to the recession, please see the Economy section of this report.