Ford predicts a $2 billion loss in Europe this year

Article by Christian Andrei, on January 30, 2013

Ford Motor Co predicted a loss of $2 billion in Europe this year as the industry struggles because of a recession that could bring down industry sales in the region to its lowest in 20 years. On the other hand, Ford expects that it will gain a profit in North America, its most profitable market. However, Ford estimates that it will achieve 10% operating margins in North America, lower than the 10.4% reported in 2012.

The weak outlook dampened its fourth-quarter results, which were higher than forecasted, pulling down its shares by up to 6.5%. At the stock's low point, the decreases eradicated over $3 billion in market value. In a research note, Barclays Capital analyst Brian Johnson wrote that this forecast "undercuts the popular investor thesis that Ford offers significant earnings expansion from a booming U.S. auto market while having 'Europe-proofed' its guidance."

This marks the fourth time in 12 months that Ford lowered its expectations in Europe, demonstrating how hard it is for automakers to foresee and handle the quick decline of sales in the region. Ford thinks that this year, the industry will be able to achieve sales of 13 million to 13.5 million vehicles in Europe. Automotive consultancy IHS Automotive said that the lower end of this range would be the lowest level that Europe has sunk to since 1993.

Chief Financial Officer Bob Shanks said that it’s likely that the euro zone will be in a recession for the entire year and that it will hit bottom this year too. Ford gets the biggest share of revenue and profits from North America while Europe is ranked second. Ford now believes that it will post higher losses in Europe in 2013 compared to the $1.8 billion loss posted last year.

Topics: ford, europe, loss

If you liked the article, share on:


Login or Create new account to add a comment!


It was only recently when BMW officially debuted the new 2017 5-Series Saloon (G30) online. At that time, this range revealed that it had driving dynamics that was the best...
by - October 26, 2016
Starting early 2017, the new Audi Q7 will be available with the new 2.0-liter TFSI four-cylinder engine that makes it not only faster but also lighter and more efficient than...
by - October 25, 2016
Soon, Fiat Chrysler’s Dodge brand will be ending the production of the Dodge Viper. So practically, the 2017 Dodge Viper will be the last Viper up for grabs. Gerry Wood...
by - October 25, 2016
Say hello to the fastest accelerating production car in the world: the new 2017 Tesla Model S P100D. Powered by a 100 kWh battery, this new model basically outruns almost...
by - October 25, 2016
Ever heard of the “Lynk & Co” automotive brand? Well, it is highly likely people haven’t. This is practically because this is new brand created by the joint venture between...
by - October 25, 2016