Ford on Thursday reported a greater than 50 per cent drop in third-quarter income and forecast larger Brexit-associated losses subsequent yr, because the Detroit automaker took successful from a security recall and warned of manufacturing cuts on account of softer US demand.
Ford’s outcomes contrasted sharply with these of its rival Basic Motors, which earlier this week reported that internet revenue had greater than doubled. Fiat Chrysler additionally reported an eight per cent revenue rise within the Nafta area, which covers, the US, Canada and Mexico, regardless of an eight per cent fall within the variety of automobiles shipped.
Ford reported internet revenue of $1bn, down fifty six per cent from $2.2bn the yr earlier, because of the prices of a door latch recall and bills associated to launching a brand new truck mannequin. Ford additionally stated it might idle some manufacturing of its fashionable F150 decide-up truck at one US plant, as US market progress slows after seven years of speedy rise. North American revenues have been down eight per cent within the third quarter from the yr ancient times.
“What’s occurring to the corporate is actually what’s occurring in North America,” Bob Shanks, the chief monetary officer, advised journalists.
The Detroit-based mostly firm additionally stated it expects the influence of the Brexit vote to worsen subsequent yr. Ford beforehand estimated the UK’s determination to go away the EU would value the corporate $200m in 2016, with $140m nonetheless to return within the second half yr. Now it’s forecasting an extra hit of $600m in 2017.
“To date we haven’t seen a serious influence on the business (in Europe),” Mark Fields, Ford CEO stated in an investor name. However as automakers increase costs within the UK in response to sterling’s weak spot, this can start to hit gross sales, he stated. “This can begin to be a damaging for the market as we shut the yr and get into 2017”, he stated.
GM earlier this week reported internet revenue attributable to shareholders of $2.77bn for the quarter to September 30, up from $1.36bn a yr in the past, largely on robust truck gross sales.
The extensively divergent outcomes between the 2 Detroit titans underscore their differing views of the well being of the US auto business, with Ford making an early name in July that the market had peaked and was heading into decline, whereas GM solely just lately stated it thought the market had plateaued however at a really excessive degree.