Sales Highlights

In 2009, 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 2009, 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 its segment 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: 45 percent of our lineup by volume was new or significantly freshened for 2009, and we are delivering on our promise of 100 percent new or freshened product by 2010. By the end of the first quarter of 2010, our Ford, Lincoln and Mercury showrooms will have a more updated lineup than at any time in the last 15 years.

Though auto sales across the industry declined in 2009 due to the recession and financial crisis, Ford, Lincoln and Mercury brands gained retail market share in the United States. Ford's market share for 2009 was 15.3 percent, a more than 1 percent increase over 2008. Our improvement in overall market share is primarily the result of favorable acceptance of our redesigned products, a product focus on industry growth segments, and customers' increasing awareness and acceptance of our commitment to leadership in quality, fuel efficiency, safety, smart technologies and value. Sales were also boosted by the U.S. government's "Cash for Clunkers" program, which incentivized consumers to trade in older, less fuel-efficient vehicles for new fuel-efficient models.

Our market share gain was led by strong sales of the Ford Fusion midsize sedan and the new 2009 Ford F-150 pickup. The Fusion, which was named Motor Trend's Car of the Year and won the 2010 Car of the Year at the North American International Auto Show, had record sales in 2009. The Ford F-150 was the top-selling vehicle in the United States for the 28th year in a row and the top-selling pickup truck for the 33rd year in a row. Ford was also the top-selling brand of crossover vehicles in 2009, led by the Ford Escape.

We hope to build on these sales successes in the coming years by continuing to introduce exciting new products. The new Ford Transit Connect was introduced in the second quarter of 2009 and was awarded the 2010 North American Truck of the Year at the North American International Auto Show. The 2011 Ford Fiesta was revealed in North America in the fourth quarter of 2009 as a new offering and will go on sale in the second quarter of 2010. The 2011 Ford Mustang debuted with a new family of V6 and V8 engines that deliver best-in-class performance and fuel economy and arrived in dealerships in the spring of 2010.

Further product introductions are planned, as we seek to substantially increase the amount of new vehicle introductions by volume versus 2009, which was already an aggressive product introduction period. For 2010, these introductions include the all-new Ford Fiesta, Focus, Explorer, Super Duty, Edge and Transit Connect Electric, the Lincoln MKX and an all-new small car for Mercury. We will also be introducing a hybrid version of the Lincoln MXZ and an EcoBoost option on the F-150.

U.S. Product Sales by Segment

Note: These numbers include Ford, Lincoln and Mercury vehicle sales in the United States.

Ford of Europe

Even in 2009's difficult economic conditions, Ford realized market share gains in 19 of its European markets as well.1 In 2009, the Ford brand's combined car and truck market share in these 19 European markets was 9.1 percent (up 0.5 percentage point from 2008). Furthermore, Ford realized sales gains in 17 of its 19 primary European markets in 2009.

The Ford Fiesta was the second bestselling model in Europe in 2009, reaching its best full-year sales since 1996. More than 15 months after its sales debut in autumn 2008, more than 675,000 customers have purchased the new Fiesta globally.

Britain and Germany are our highest-volume markets within Europe. Any change in the British or German market has a significant effect on the results of our Ford Europe segment. The global economic crisis caused 2009 industry sales in Britain to decline by 10.5 percent from 2008 levels (which were already down considerably from 2007 levels, as the economic crisis hit Britain earlier than many other European countries). As a result of government stimulus in Germany, 2009 industry sales volume there actually increased by 18.2 percent compared with 2008. The Ford brand's combined car and truck share in these markets in 2009 was 16.8 percent in Britain (up 0.4 percentage points from the previous year), and 7.6 percent in Germany (up 0.6 percentage points from the previous year).

Sales in Europe were also increased by government vehicle "scrappage" programs that gave consumers incentives for trading in older, less fuel-efficient vehicles and buying new, more fuel-efficient models. These incentive programs occurred in some of our larger markets including Germany, the United Kingdom, France, Spain, Austria, Italy, Ireland, the Netherlands and Portugal.

In 2009, Ford's share of the Turkish market increased by 0.4 percentage points to 15.1 percent, the eighth year in a row that the Ford brand led the market in sales in Turkey. Industry sales volume in Russia decreased dramatically during 2009, shrinking by nearly 1.6 million units or about half of its total volume as a result of the economic crisis. As a result, sales of Ford brand vehicles decreased by nearly 56 percent from 2008 to about 82,000 units in 2009.

In 2010, we will continue to build on our product momentum, with at least 11 vehicle reveals or launches planned for 2010 – including the all-new Ford C-MAX and Grand C-MAX; the freshened Ford Galaxy, S-MAX and Mondeo; and a new Focus ECOnetic. An expanded range of fuel-efficient powertrains, including the new Ford EcoBoost 2.0-liter and 1.6-liter engines and further improved TDCi diesel powertrains, will also be available across the range, together with new technologies and innovations. In the first quarter of 2010, we also announced a $2.3 billion investment in UK manufacturing facilities over the next five years to support the production of low-carbon emission vehicles.

Asia Pacific and Africa

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 and Africa region. Our wholesales in this region were up 14 percent in 2009, primarily due to strong sales in China.

Asia Pacific and Africa Market Share2

In 2009, our sales in China totaled approximately 345,500 units. This sales figure includes Ford-badged 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 began production in 2003 and now builds Ford, Volvo and Mazda models. The JMC joint venture assembles Ford and JMC 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. Ford currently has three vehicle manufacturing plants in China; one CFMA plant in Chongqing, one CFMA plant in Nanjing and one JMC plant in Nanchang. In 2009 we announced plans for a new CFMA plant, which will also be located in Chongqing. This state-of-the-art manufacturing facility, which is scheduled for completion in 2012, represents an investment of almost $500 million. The flexible, 1-million-square-meter facility will begin production of Ford's next-generation Ford Focus in 2012 and will be capable of producing a diversified range of products in the future. The plant will have an initial production capacity of 150,000 vehicles per year. It will include Ford's environmentally friendly and energy-efficient three wet paint technology. When this plant comes online in the first quarter of 2012, Ford will have a production capacity in China of 600,000 passenger vehicles per year.

We are also increasing our introduction of new products in China. In 2009, we began producing the new Ford Fiesta for the Chinese market at CFMA's Nanjing plant. The Nanjing facility is the first to build the four-door version of the Fiesta. Ford will introduce four new vehicles in the Chinese market over the next three years. We will also introduce the fuel-efficient EcoBoost engine and PowerShift transmission technologies in China in 2010, further expanding Ford's commitment to delivering more sustainable transportation in all the markets we serve.

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. We have invested $500 million to expand our current manufacturing facility in Chennai, India. This investment was used to build a fully integrated and flexible engine manufacturing plant that began production of the all-new Ford Figo – described below — in 2010. The new facility will be capable of producing 250,000 engines per year. The plant will also be equipped with Ford's environmentally friendly and energy-efficient three wet paint technology. Overall, the plant's annual vehicle production capacity will be doubled to 200,000 units after the expansion, which is also expected to create 1,000 new jobs.

Ford introduced the Ford Figo, an all-new four-door hatchback small car in 2010. This vehicle was designed with the help of Ford's Indian design and engineering team to meet the needs of Indian and other Asian markets. It represents Ford continued commitment to delivering exciting, high-quality and fuel-efficient products in growing markets like India and the rest of Asia.

In Thailand we have invested $500 million in a new, highly flexible, small passenger car plant at AutoAlliance Thailand – a joint venture between Ford and Mazda. This facility began producing small cars in 2009; in 2010, it will begin producing the new Fiesta for other major Asian markets.

South America

Ford is the fourth-largest automaker in South America, and our principal markets include Brazil, Argentina and Venezuela. Ford's 2009 market share for the region was 10.2 percent, up one-half percentage point from 2008.

South America Market Share

* The South American market share is based, in part, on estimated vehicle registrations for our six major markets.

We continue to launch new products to meet the needs of our South American customers. In 2010, we are bringing a flexible-fuel version of the European-based Ford Focus to Brazil. Nine additional product introductions are planned for the region in 2010. We are making our largest-ever investment in Brazil operations in a five-year period, by investing R$4.5 billion from 2011 to 2015 to accelerate the delivery of more fuel-efficient, high-quality vehicles, which customers in Brazil desire. We are also investing approximately $250 million in our Argentinean operations between 2010 and 2012 to fund new product development and quality improvements.

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.