Ford to Boost EcoBoost Output

Ford Motor Co. ( F - Analyst Report ) intends to triple production of vehicles equipped with its EcoBoost engines to 480,000 vehicles annually by 2015 from 141,000 units in 2011 in order to meet stricter emission standards in Europe. As per the company, EcoBoost engines are capable of reducing carbon dioxide emissions by 15%.

The European Union (EU) has set a target of emission reduction by nearly 20% to 130 grams of CO2 per kilometer by 2015 from 161.3 grams in 2006. Ford’s fuel efficient and environment-friendly EcoBoost engines will help the company successfully meet the EU target.

Ford also plans to double its vehicle models equipped with the engines by 2015 from the existing five models. The automaker anticipates more than half of its cars marketed in Europe by 2015 to be equipped with the engine.

Ford plans to manufacture 1.3 million units of EcoBoost cars in Europe from 2012 to 2015. As many as 800,000 units of them will be produced with a small 1.0-liter engine that are manufactured in Romania and Germany. Other variants of engines include 1.6 liter and 2.0 liter.

Ford’s production plans may be in line with Europe’s emission regulation policies but it needs to worry about the slacking automotive market in the continent at the same time. In April, car sales in the continent dipped 6.5% to 1.06 million units as consumers stayed away from showrooms in a weak economy triggered by the sovereign-debt crisis in Euro zone.

All the major automakers, except Daimler AG ( DDAIF ) and Bayerische Motoren Werke AG (“BMW”), posted decline in sales during the month. Among the U.S. automakers, General Motors Company ( GM - Analyst Report ) posted an 11.1% fall in sales to 85,493 units driven by lower Opel/Vauxhall (16.9%) and GM brand (50%) sales while Fordsaw an 8.3% drop in sales to 79,223 units.

In 2011, Ford lost $27 million in the continent. The company expects to lose between $500 million and $600 million further this year.

Ford, a Zacks #3 Rank (Hold) stock, posted a sharp 20% fall in profits to $1.6 billion in the first quarter of 2012 from $2.0 billion in the same quarter of 2011. On per share basis, profits ebbed 17% to 39 cents from 47 cents in the first quarter of 2011. Nevertheless, it was higher than the Zacks Consensus Estimate of 35 cents.

The automaker has attributed the decrease in profits to higher tax expense, lower operating results and higher charges emanating from buyouts of hourly workers in the U.S. as part of its UAW agreement in 2011.

The company’s profits drastically fell in all its operating regions, except North America. In fact, it recorded a loss in Europe and Asia Pacific Africa compared with a profit in the comparable quarter of 2011.

Total revenue in the quarter slipped 2% to $32.4 billion, barely surpassing the Zacks Consensus Estimate of $32.0 billion. The fall in revenues was attributable to lower wholesale volumes in Europe and Asia, partially offset by higher volumes in North America and South America.