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File photo of a Ford logo is displayed on a wheel at a car dealership in Omaha, Neb.Nati Harnik/The Associated Press

Ford Motor Co. doubled its quarterly dividend to 10 cents per share, its highest in seven years, on the back of strong sales in North America and a healthy balance sheet.

The first-quarter payout, which will cost No. 2 U.S. auto maker about $370-million, comes despite recent market share losses and weakness in its European business.

"Ford's plan is to grow its dividend, consistent with earnings and liquidity growth, to a level that is sustainable through all business cycles," the company said in a statement.

Ford last paid a 10-cent dividend in May, 2006. Shortly after that, the company reduced and later suspended its dividend as it struggled to avoid bankruptcy. It restored dividends in December, 2011.

"We had thought that a dividend increase was likely but this announcement is larger than we expected," RBC Dominion Securities analyst Joseph Spak said.

"Today's announcement shows strong confidence in their outlook, balance sheet and liquidity."

The company sa id it increased its liquidity position by $2-billion through the first three quarters of 2012.

Earlier this month, Ford said its U.S. sales crossed 2 million cars in 2012 and reported its strongest December sales since 2006. It beat Wall Street profit forecast when it last reported results in October.

The auto maker, however, has acknowledged losing market share as it struggles to keep up with consumer demand. Losses from Europe are expected to be at least $3-billion over the next two years, and the company has announced plant closures and job cuts to save costs.

Ford's market share fell to 15.5 per cent in 2012 from 16.8 per cent in 2011.

The dividend is payable on March 1 to shareholders of record on Jan. 30.