Ford Motor Co. (F) posted a 20% rise in sales to 53,440 vehicles in China during March. The company’s joint venture partner in China, Chongqing Changan Automobile delivered 42,157 vehicles during the month. This has brought the total sales to 140,566 vehicles for the first quarter of the year, an increase of 19% from the year-ago quarter.
In contrast, Ford recorded a 19% gain in sales to 212,777 vehicles during the same month in the U.S. The company’s sales were driven by small cars including Fiesta subcompact, new Explorer crossover, Fusion sedan and Escape small SUV. Ford F-Series remained the best-selling vehicle in the U.S. Its sales increased 25% to 53,272 units during the month.
Recently, Ford revealed its plan to invest 7 billion yuan ($ 1.1 billion) in China in order to expand production capacity. The automaker will enhance the production capacity at its new plant in Chongqing, operated by Changan Automobile Co, to 650,000 units by 2012. It will also increase power train and engine capacity to 750,000 units from 400,000 units in the country.
Ford has been pursuing a major expansion plan in the emerging countries, including Argentina, Brazil, China, India and Thailand. Through the expansion plan, the automaker aims to tap the growing market potential in the countries, especially those in Asia. Since last year, Ford has invested $ 510 million in China and $ 500 million in India as part of its expansion plan.
Last year, Ford has added 40 new dealerships in China as a part of its expansion plan. Further, the automaker plans to add 66 new dealerships by the end of the year, raising its total dealerships to 340 in the country.
Ford’s sales in China grew 40% in 2010 driven by higher sales of Focus compact and Fiesta subcompacts. Changan Ford sold 403,283 vehicles, an increase of 34% from the last year. Meanwhile, Ford’s commercial vehicle venture in China, Jiangling Motors Corp., reported an impressive 56% rise in sales to 178,999 units.
Ford’s domestic rival, General Motors Company (GM), posted a 29% increase in sales in the country to 2.35 million vehicles in 2010. J.D. Power and Associates has predicted sales in China to grow by 10.5% for 2011.
Ford, a Zacks #3 Rank (Hold) stock, posted a 24% fall in profit to $ 1.2 billion or 30 cents per share (before special items) in the fourth quarter of 2010 from $ 1.58 billion or 43 cents per share (before special items) in the same quarter of 2009. With this, the automaker has missed the Zacks Consensus Estimate by 19 cents per share.
The decline in profit was attributable to lower year-over-year revenues generated by the company’s automotive operations as well as the financial arm. Total revenue during the quarter ebbed 7% to $ 32.5 billion. However, excluding revenues from Volvo, sales improved by $ 1.6 billion or 5% from the fourth quarter of 2009.
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