Aggressive actions to reduce cost alongside a more profitable sales mix of products is driving a much-improved performance in Ford's European business according to CEO Mark Fields.

Europe saw a USD946m hike in 2016 net profit to a record US $1.2bn on sales up $0.3bn to $28.5bn and unit volume up 9,000 vehicles to over 1.5m. Ford also posted a record operating margin for Europe of 4.2%.

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The fourth quarter was the seventh consecutive profitable quarter in Europe and the company expects to remain profitable in the region in 2017, although at levels 'below 2016 due mainly to weaker sterling and higher costs associated with launch of Fiesta and EcoSport'.

In a conference call with analysts, Ford CEO Mark Fields said that Ford is seeing the benefit of restructured operations and enhanced product mix.

"We made tough choices and strategic decisions including restructuring in Russia when others retreated and they're paying off," Fields said. "It's been driven by an aggressive focus on cost, with nearly $400 million in cost improvement in 2016 alone, but we've also had an equally strong focus on our product strategy or the revenue side."

Fields said that it has been driven by a more favourable mix of products compared to 2015, such as the Edge, but also a shift to higher spec variants in sales. "More than half of our passenger car sales in 2016 were high series vehicles," Fields said. "The Titanium, Vignale, the ST, the RS – these helped push the series mix up more than $300 million compared with the previous year."

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Ford CFO Bob Shanks also said that Ford expects results in Russia to improve in 2017.

Ford 2016 net profit falls $2.8bn