Ford Motor Co. (F) announced its plan to roll out as many as 20 new models in Europe over the next three years in order to boost car sales in the continent. The company will also expand capacity at some of the plants in and around Europe in order to support the new model launches.
The company has announced an investment of €812 million ($1.2 billion) in its plant in Valencia region of eastern Spain. It will create assembly lines for two new models – the Kuga crossover SUV and Transit Connect van – at the plants.
Ford will also enhance capacity to 400,000 units per year at the Kocaeli plant in northwestern Turkey through its joint venture, Ford Otomotiv Sanayi AS (Ford Otosan). In April, the joint venture announced investment of €205 million ($290 million) at the plant that will help manufacture a new van model.
Ford revealed that it will begin manufacturing the Ford B-Max model beginning next year and fuel-efficient 1-liter EcoBoost engines in 2012 in Craiova, Romania. The company has invested €675 million ($955 million) in Romania.
The expansion in Europe will give way to a strong workforce at the plants. The company will hire 500 employees at the Valencia plant and 200 employees at two German plants. The company will begin producing revamped Focus model and an electric-powered version at a factory in Saarlouis, Germany, adding upto 150 jobs.
Recently, Ford revealed that it expects global sales to expand by 50% to 8 million vehicles by 2015 given the potential growth in Asia, mainly China and India; and rising demand for small cars. However, Ford still looks up to U.S. and Europe for the lion’s share of its sales and profits.
The Zacks #3 Rank (Hold) company posted a roaring rise of 48% in profits to $2.61 billion in the first quarter of 2011 from $1.76 billion in the same quarter of 2010. On earnings per share basis, profits rose 35% to 62 cents per share from 46 cents per share a year ago, thereby topping the Zacks Consensus Estimate by 12 cents per share.
It was a turnaround performance with respect to the fourth quarter of 2010, when the automaker recorded a 24% fall in profit. However, the company did not deprive their stockholders from enjoying a profit for seven straight quarters after years of losses. In fact, it posted a profit during the quarter that was the best since the same quarter in 1998.
Total revenue during the quarter escalated 18% to $33.1 billion, surpassing the Zacks Consensus Estimate of $30.5 billion. The increase in revenues was attributable to a 12% rise in sales to 1.40 million vehicles. In March, the automaker topped General Motors Co. (GM) for the second time since 1998.
During the quarter, the seasonally adjusted annual rate of sales was 13.4 million in the U.S. and 15.9 million units for the 19 markets that Ford captures in Europe. These helped score a market share of 16% in the U.S. and 8.5% in Europe.
FORD MOTOR CO (F): Free Stock Analysis Report
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