DETROIT (Bloomberg) -- Ford Motor Co., trying to end losses in Europe, said government aid and growing supplies of its SUVs in Russia will boost demand in one of its most under-performing markets within the region.
Local production of the Kuga compact SUV and the EcoSport subcompact SUV will combine with the Explorer large SUV that Ford started building in Russia in April to deliver a boost in second-half sales, said Ted Cannis, CEO of the Ford Sollers unit, without providing specifics. The unit is a joint venture between Ford and OAO Sollers.
Ford's deliveries in Russia fell 18 percent this year through May, trailing a 4.5 percent industrywide drop.
"The government may take some actions to improve industry sales, and with our own actions of broadening the SUV portfolio and more availability of commercial vehicles, I would expect a significant improvement in the second-half performance," Cannis said.
Ford CEO Alan Mulally is filling holes in the automaker's product portfolio in a country that could soon pass Germany to become Europe's largest market. Sales of passenger cars and light commercial vehicles in Russia are forecast to total 2.8 million, down 5 percent compared with 2012, according to data from the Moscow-based Association of European Businesses (AEB).
SUV sales accounted for 31 percent of the Russian market last year, according to Russia's AUTOSTAT market-research agency.
Russian President Vladimir Putin indicated the government was preparing measures to boost the economy, including incentives for the auto industry that could be similar to those offered in 2008, Cannis said. The previous program boosted demand for lower-priced cars and helped clear older, high-emission vehicles from Russian roads, he added.
Ford is overhauling its European model lineup. That includes a redesigned Mondeo mid-sizes sedan by late next year, when the company foresees the market beginning to rebound from a six-year slump.
The automaker forecasts losses in the region will widen to about $2 billion this year from $1.75 billion in 2012.