fordFord Motor (F) has seen big U.S. sales gains in recent months, thanks to new models and a renewed focus on its brand. Now comes word that the iconic U.S. auto maker is a hit in Europe, too. Ford said Thursday that European sales rose 16% to 192,500 vehicles in March, displacing Volkswagen as the continent's top auto supplier.

The new Ford Fiesta subcompact car was key in luring consumers into showrooms, with more than 68,000 sold last month, the highest for any Ford model on record in a single month in Europe, the carmaker said. It gained 0.4% in market share during the month -- the company's best performance there in more than a decade.

No. 2 for the Quarter

Ford said it increased market share in 10 of its 19 markets in Europe and took top sales spots in Denmark, Hungary, Ireland, the Netherlands, Turkey and the U.K. March is traditionally a strong month in the U.K. because of the registration plate change, and Ford sold 72,700 vehicles there, up 10,300, or 16.4%, compared to the same period a year ago, the carmaker said.

Though Ford bested VW in March, the Dearborn, Mich.-based company remained No. 2 for the quarter with 9.4% of the market, unchanged from a year ago. By comparison, in the U.S., Ford holds about 17% of the market. In the three months ending March, Ford sold 391,100 vehicles in the U.S., or 9% more than in the same period in 2009.

For its part, VW said its first-quarter sales rose nearly 25%, with some 1.73 million cars delivered in the period. VW, Europe's largest auto maker, didn't provide separate figures for March.

Government Support

Despite a great sales month, challenges lie ahead as European countries phase out their versions of "cash for clunkers" programs -- known in Europe as "scrappage" incentives -- that have helped to perk up sales. While the company understands such programs won't be renewed, "we do ask that governments consider other sales incentives," said Ford of Europe vice-president Wolfgang Schneider.

One example Schneider provided would be tax breaks for commercial vehicles, which would benefit not only smaller companies, "but the wider economy and automotive industry as well," he said.

Ford shares were down around 2% in midday trading Friday on Wall Street. For the year, the stock is up about 40%.


Maintaining Momentum?

Ford may have had a good March, but whether it can hold onto its sales gains in Europe absent government incentives remains to be seen.

Ford beat Toyota Motor (TM) in February to become America's No. 2 auto maker for the month. But generous factory incentives brought consumers flooding back into Toyota showrooms in March. Only time will tell if Ford's freshened line-up can keep sales aloft both here and abroad.

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