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Management’s Discussion and Analysis of Financial Condition and Results of Operations
Ford Motor Company | 2007 Annual Report 23
Details of Automotive sector market share for selected markets for 2006 and 2005, along with the level of dealer stocks
as of December 31, 2006 and 2005, are shown below:
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__________
(a) Dealer-owned stocks represent our estimate of vehicles shipped to our customers (dealers) and not yet sold by the dealers to their retail
customers, as well as some vehicles reflected in our inventory.
(b) Includes only Ford and, in certain markets (primarily U.S.), Lincoln and Mercury brands.
(c) South America market share is based on vehicle retail sales for our six major markets (Argentina, Brazil, Chile, Colombia, Ecuador, and
Venezuela).
(d) European 2006 market share is based, in part, on vehicle registrations for the 19 European markets we track (Britain, Germany, France, Italy,
Spain, Austria, Belgium, Ireland, Netherlands, Portugal, Switzerland, Finland, Sweden, Denmark, Norway, Czech Republic, Greece, Hungary,
and Poland).
(e) Asia Pacific and Africa 2006 market share is based on vehicle retail sales for our 12 major markets (Australia, China, Japan, India, Indonesia,
Malaysia, New Zealand, Philippines, South Africa, Taiwan, Thailand, and Vietnam).
(f) Dealer-owned stocks for Asia Pacific and Africa include primarily Ford-brand vehicles as well as a small number of units distributed for other
manufacturers.
Overall Automotive Sector
The decline in earnings primarily reflected the effect of Jobs Bank Benefits charges and higher personnel-reduction
program charges in Ford North America ($4.3 billion), less favorable volume and mix – mainly lower market share,
adverse product mix in Ford North America, and lower dealer stock levels – ($3.2 billion), pension curtailment charges
($2.7 billion), impairment charges related to our long-lived assets in Ford North America and Jaguar and Land Rover
operations ($2.5 billion), and lower net pricing ($2 billion). These adverse factors were offset partially by favorable cost
changes ($1.5 billion). Our efforts to restructure the Ford North America business resulted in the Jobs Bank Benefits and
personnel-reduction program charges, and the related pension curtailment charges. The favorable cost changes primarily
reflected lower manufacturing and engineering costs, pension and OPEB costs, and overhead costs.
The decline in revenue primarily reflected lower wholesale unit volumes in Ford North America, adverse product mix,
and lower net pricing.
The Americas
Ford North America Segment. The decline in earnings primarily reflected the effect of Jobs Bank Benefits charges and
higher personnel-reduction program charges, less favorable volume and mix (mainly adverse product mix, lower market
share, a reduction in dealer stock levels, and lower industry volumes), pension curtailment charges, lower net pricing, and
impairment charges related to our long-lived assets, offset partially by favorable cost changes. The favorable cost
changes reflected improvements in pension and OPEB costs, manufacturing and engineering costs, warranty-related
costs, and overhead costs.
Ford South America Segment. The increase in earnings primarily reflected higher net pricing, improved volume and
mix more than accounted for by higher industry volume, and a legal settlement relating to social welfare tax liability, offset
partially by unfavorable cost changes. The unfavorable cost changes primarily reflected higher net product costs, and
manufacturing and engineering costs.
Ford Europe and PAG
Ford Europe Segment. The improvement in results primarily reflected reduced charges for personnel-reduction
programs, improved volume and mix, and favorable cost changes, offset partially by unfavorable changes in currency
exchange rates. The favorable cost changes primarily reflected lower overhead costs, warranty-related costs, net product
costs, and manufacturing and engineering costs, offset partially by higher pension costs.