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Management’s Discussion and Analysis of Financial Condition and Results of Operations<br />
Ford Europe Segment. The charts below detail key metrics and the change in 2010 pre-tax operating profit compared<br />
with 2009 by causal factor.<br />
The increase in wholesales for Ford Europe primarily reflects higher wholesales in Turkey, Russia, and other eastern<br />
European markets, offset partially by lower wholesales in the 19 markets that we track (primarily lower market share and<br />
industry volume, offset partially by the non-recurrence of prior-year reductions in dealer stocks). The decrease in market<br />
share reflects our decision to reduce participation selectively in low-margin business, as well as the end of the favorable<br />
effect of government scrappage programs on our small car sales.<br />
The improvement in results primarily reflects favorable cost changes and higher parts and subsidiary profits, offset<br />
partially by unfavorable volume and mix (primarily lower market share offset partially by the non-recurrence of prior-year<br />
reductions in dealer stocks). The favorable cost changes primarily reflect material cost reductions and lower warranty<br />
costs, offset partially by higher structural costs (in part to support product launches and growth of our product plans).<br />
48 Ford Motor Company | 2011 Annual Report
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