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By Eric Mayne / The Detroit News
John T. Greilick/The Detroit News

Ford Motor Co.’s European luxury brands will reverse the $897 million loss they recorded in 2002 — the second major turnaround engineered by executive Mark Fields in less than three years.

“We’re going to be profitable for the year,” said Fields, chairman and CEO of Ford’s Premier Automotive Group. “I’m a big believer in disciplined execution, which means we have to have the right passion for the products. But we have to have just as much passion to deliver the (financials).”

Fields, who shepherded Mazda Motor Corp. back to profitability with a one-year $1.2 billion turnaround in 2001, declined to be specific about PAG’s results, pending the Jan. 22 release of Ford’s financial results.

Mazda, of which Ford owns 33 percent, was the focus of a turnaround strategy implemented by Fields as the Japanese automaker’s top executive.

Profitability could solidify Ford’s luxury brand strategy in the minds of analysts who were skeptical when Volvo, Land Rover, Jaguar, Aston Martin and Lincoln were brought together in 2000 by Ford’s then-CEO Jacques Nasser. Lincoln has since been excised from PAG and returned to the Ford fold in North America.

“From a financial standpoint, I say: a very positive year,” Fields said. “And from a product standpoint, I say: a very positive year, as well.”

In a bid to continue this momentum, PAG brands will introduce an array of new products in the coming months.

They include:

* The Volvo S/40 small sedan and V/50 small wagon.

* Two Aston Martin marques - the DB9 and Vantage.

* A “baby” Range Rover from Land Rover and a redesigned Discovery.

* A long-wheelbase version of the Jaguar XJ.

The latter will be unveiled in the spring at the New York Auto Show.

“A long wheelbase (XJ) is going to have a tremendous potential in this market,” said Joe Greenwell, chairman and CEO of Jaguar and Land Rover.

PAG appeared to turn the corner following the second quarter of 2003, when it recorded a $166 million profit — the first time it was in the black since 2001. Despite a third-quarter misstep in which it recorded a $22 million loss, Fields promises positive full-year earnings.

“We’re measured on what we deliver, not on what we’re trying to deliver,” he said. “Talk is cheap.”

Ford does not disclose detailed financial results for individual PAG brands, but Vic Doolan, president and CEO of Volvo Cars North America, says the brand will turn a profit for 2003.

And Ulrich Bez, Aston Martin’s top executive, said “You can’t be a prestige brand and not be profitable.”

When the S/40 becomes available in spring, Doolan said its starting price will be $24,190.

Can Volvo still be a luxury brand with cars at such prices?

“I don’t think it’s price that determines luxury,” he said. “It’s the value. I’d say we can go to where we are and still have a premium vehicle.”

Jeff Schuster, director of forecasting at J.D. Power and Associates, said PAG profitability bodes well for Ford’s approach to luxury vehicle marketing.

“I know, talking with people separately, that it was a struggle for them to work together in the beginning,” Schuster said, adding that each brand wanted to assert its independence from the group.

Jaguar’s U.S. sales were down 5.5 percent compared with 2002, while sales at Volvo and Land Rover were up 2.6 percent and 0.7 percent, respectively.

With ex-PAG brand Lincoln factored in, Ford controlled 21.5 percent of the U.S. luxury vehicle market.

(Photo)Jaguar unveils its 2005 S-Type Monday at the Detroit auto show. Mark Fields, who heads Ford's luxury umbrella, Premier Automotive Group, sees a profitable year for its products, which also include Volvo, Land Rover and Aston Martin.

 
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