Ford today announced that its profits fell to $1.4bn (£862m) in the first quarter of 2012 from $2.6bn a year earlier. It is obviously proving difficult to drive through the economic hardship in some key markets. The drop is a disappointment to Ford, which has been attempting to boost its capabilities in China in an attempt to ramp up sales of the Blue Oval.
The company claims about half the drop is due to it paying more tax, but the results show the company has also run out of gas in European markets, where it made a loss of $149m. Sales were down by 60,000. The ongoing financial struggles plaguing the eurozone will be at least partly to blame for a fall in sales, especially since both Spain and the UK have found themselves back in recession and with extremely challenging job markets. Ford also suffers, as it always has done, from a lack of badge prestige in comparison with its European rivals.
The company was quick off the mark in the first quarter this year in North America however, as pre-tax profits hit their highest in the region since 2000, rising 17% to $2.1bn. This sounds like great news, but it is an isolated success compared with the other markets the company operates in. It is also in stark contrast with some of the firm’s major global competitors – Hyundai, Honda, Daimler and Volkswagen have all announced increases in profit for the first quarter.
If Ford can reach its target of increasing sales to 50% (totalling 8 million cars) by 2015, it will be on the home straight having made inroads in an important emerging market. For now, though, the mood at Ford HQ will be pretty deflated…