Ford has reported lower-than-expected profits for Q1 2015 after it sold fewer vehicles in North America and continued to lose money in Europe and South America.
Pre-tax profit for Q1 2015 rose $24 million to $1.4 billion, but revenue slipped $2 billion to $33.9 billion.
The carmaker sold 1.57 million vehicles, down 21,000 compared with a year earlier.
There were 678,000 sales in North America – a fall of 39,000.
The introduction of a new F-150 pickup affected sales in North America as vehicles are still being sent to dealers, while customers waited for a new model of the Ford Edge SUV. The two models are among the company’s most profitable.
However, Ford said it expected a “very strong year” in North America, despite a slight fall in revenue to $20 billion and an 11% slide in pre-tax profit to $1.34 billion.
Ford – which employs about 194,000 people globally at 66 plants – maintained its full-year forecast for pre-tax profits of between $8.5 billion and $9.5 billion.
Ford CFO Bob Shanks said the carmaker was on track for a “breakthrough year”.
CEO Mark Fields also said Ford would “grow progressively stronger” as recent launches “start to pay off”.
The results were lower than analysts had expected, Ford said, because they had forecast a tax rate of 29% for the quarter, while the company paid 34%.
Europe remained a weak spot even though sales rose 2% to 376,000 vehicles in the quarter, with revenue down $900 million to $6.9 billion and pre-tax losses totaling $185 million.
There was robust demand for commercial vehicles such as the Transit van.
Revenue in South America fell 20% and the carmaker remained in the red for the region with a $189 million loss as it replaced legacy products with those from its “One Ford” range.
That was better than the $510 million loss for the period in 2014, which included a $310 million charge to offset currency devaluation in Venezuela.
Prospects in Asia were brighter, as sales rose 16,000 to 366,000 vehicles and a $103 million profits.
The financing operation, Ford Credit, returned a profit of $483 million on the back of higher lending.
Ford Q1 dividend was raised by 20% to 15 cents a share.
With the current political agenda centred on whether or not the UK is experiencing any growth, one statistic in particular is capturing the attention of the media is the fact that new car sales rose 17.7% in March 2014, meaning that the UK has the fastest growing registration of new cars in Europe. 464,824 vehicles were sold in March, which is typically the busiest time of year for new car sales; 688,122 new cars have been sold so far this year.
UK’s new car sales rose 17.7 percent in March 2014 (photo PA)
There are plenty of reasons for this growth – some superficial, other less so. Consumer spending is rising and this is reflected in new car sales, but one point that seems far more pressing is the fact that the UK’s new car market is subject to all sorts of interesting new finance schemes. If you buy a new car these days, you’re often given the chance to pay a monthly rate for three years before trading in your car for a new model. To some degree you’re effectively leasing the car, but there’s always the option to buy.
Anyone who has bought a new car recently will probably be looking at it in terms of monthly payments, rather than the overall price on the ticket or the cars residual value – just like they would a mobile phone contract or a gym bill. It seems that personal contract purchases are now part of the fabric of everyday life, and the fact that the new car market in the UK is the first to jump on this wagon could either be seen as a good or a bad thing.
The UK car market is also surrounded by plenty of cheap credit which is encouraging people into the market and now they can feel the ‘green shoots of recovery’. Contract-type schemes are less prevalent in Europe where car sales have floundered over the last 6-10 years. Car sales in the EU region fell by 2.7% in 2013.
This is good news for used car sites such as CarShop, and the second hand car market as a whole. The stock of used cars will rise with the purchase of new ones, and there’s set to be some superb bargains. Cars like the Volkswagen Up, Skoda Citigo, Seat Mii, Ford Ka, Toyota Aygo and the Peugeot 107 reflect a new, more economical attitude to driving and many of these marks will now be flooding onto the second hand market as people upgrade or renew.
It’s also worth noting that sales of cars which run on alternative fuels rose by 63.8% to a significant 8,713. This figure might not be enough to show that the UK has turned the corner in terms of green energy, but it certainly illustrates that the hybrid car is a credible alternative.
US workers have voted against union representation at a Volkswagen car plant in the southern state of Tennessee.
The vote derails efforts by the United Auto Workers (UAW) to organize foreign-owned factories in the southern US.
Experts had expected the ballot to pass in favor of unionizing, after Volkswagen tacitly supported the move.
The vote had faced resistance from Republican politicians, who argued it would slow economic growth.
It was the UAW’s first attempt in 13 years to unionize a plant not run by one of the three big US carmakers – General Motors, Ford, and Chrysler.
Analysts say the result could significantly curtail future organization efforts and further dent the union’s reputation.
Membership is reported to have plummeted 75% since the late 1970s, leaving it with barely 400,000 supporters.
Volkswagen workers vote against UAW union in Chattanooga
Some 1,550 workers began voting at the plant in Chattanooga on Wednesday and rejected the union plan by 712 to 626 with an 89% turnout.
UAW spokesman Gary Casteel said “some outside influence” had been exerted on the poll.
Some believe the loss will make it harder for the UAW to recruit members at other southern plants.
The push for organization started after Volkswagen opened its only US facility in Chattanooga in 2010.
The manufacturer’s 61 other plants around the world have so-called “work councils”, which represent employees’ interests in daily dealings with management.
Mandated by law in Germany and popular in other European countries, works councils have never been tried in a US factory.
Prior to the ballot, VW’s Chattanooga chief executive Frank Fischer said in a statement: “Our plant in Chattanooga has the opportunity to create a uniquely American Works Council, in which the company would be able to work co-operatively with our employees and ultimately their union representatives, if the employees decide they wish to be represented by a union.”
Conservative groups had leaded a fierce anti-union campaign in the lead-up to the ballot.
Opponents warned it would jeopardize Volkswagen’s tax incentives and hurt the local economy by scaring away business.
European car sales were 10.3% lower in March 2013 from a year earlier, the 18th consecutive month of falls.
The figures, from the Association of European Carmakers (ACEA) showed most carmakers saw sales drop, with Peugeot Citroen and Toyota suffering the most.
Continuing economic stagnation across Europe has depressed sales for almost six years.
The UK was the only country in Europe where sales rose, with registrations up by 5.9%.
Germany, the best performing economy in the eurozone, saw the biggest fall in sales of 17.1%, with France just behind with a drop of 16.2%.
European car sales were 10.3 percent lower in March 2013 from a year earlier, the 18th consecutive month of falls
“The car industry is suffering just as the European economy is suffering,” said motor industry analyst Christian Stadler, associate professor of strategic management at Warwick Business School.
The falls came despite hefty incentives on offer to buyers of new cars.
The Reuters news agency said that average retail sales incentives in the top five markets – Germany, the UK, France, Italy and Spain – had risen 13% to almost 2,400 euros ($3,200) per vehicle.
Last month, 1.31 million cars were registered in Europe.
Peugeot and Toyota were the worst affected manufacturers, with sales falling more than 16% from a year earlier, Volkswagen also suffered a sharp drop, with sales down 15% and the US carmaker General Motors saw sales fall by 12.8%.
Peugeot has forecast a sales fall of up to 5% this year, although since that guidance was given the chief executive has said that the outlook has worsened.
Jaguar was the only carmaker to see serious gains, with sales up by 21%. Mercedes also saw sales rise, although only by 0.8%.
“There are firms bucking the trend, like Jaguar Land Rover who are positioned well in the emerging markets, and you see that those high-end brands aimed at richer customers are not doing as badly,” said Christian Stadler.
“Car firms positioned in this way will be able to avoid the worst of the European slowdown.”
In a separate announcement, Toyota, which was a pioneer of petrol-electric hybrid vehicles with its Prius model in 1997, said sales of these and its other hybrid models had now passed five million.
Toyota said it had sold a total 5.125 million hybrid vehicles by the end of March, and they now accounted for 14% of its global sales.