Ford served up its best quarterly performance since 2000 as the US carmaker benefited from strong selling prices and increased demand for its pickup trucks and sport utility vehicles.
The Michigan-based manufacturer — number two in the US and sixth overall in global car sales — beat expectations with its best quarterly pre-tax profit for North America. The continent accounted for $2.6bn of the group’s total $2.9bn pre-tax profit for the three months to the end of June. Group profit was up 10 per cent from a year ago.
Mark Fields, Ford chief executive, said the second half of the year would be even stronger, as production of the new version of F-150 pickup truck ramped up in time for the main autumn and winter selling season.
The results mirrored the performance of General Motors, Ford’s Detroit-based rival, which last week reported strong North American sales of high-margin light trucks, improving earnings in China and a European business that came close to break-even.
US sales are being helped by cheap fuel, low interest rates and a rising economy — and Ford is further benefiting from a fresh line-up of products. “You put all that together and the combination is ‘Pow!’,” said Bob Shanks, Ford’s chief financial officer.
But prospects for China are less rosy. Ford downgraded its forecast for full-year sales in China to 23m-24m units from 24.5m-26.5m. The company is the first large carmaker to revise estimates downward and its prediction would equate to the first full-year sales fall for the industry in the world’s largest market since 1990.
Ford operates joint ventures in the country with Chang’an, as well as a commercial vehicle partnership with Jiangling Motors. Mr Fields said commercial vehicle sales had declined further than passenger cars, which was “a bit of an indicator”.
“We’re still very bullish on China but it’s going to go through its fluctuations. That’s what happens in emerging markets,” he said.
Still, Ford reported a rise in equity income from its joint ventures in China, despite flat wholesale unit sales. The wider Asia-Pacific region posted record quarterly earnings.
Elsewhere, Ford continues to lose money in South America as well as in Europe and its nascent Middle East and Africa business.
Global revenues declined slightly to $37.3bn because of the effects of a strong dollar. Net income came in at $1.9bn, up 44 per cent on the same period in 2014, and the automotive operating margin was a healthy 7.2 per cent. The company reaffirmed its guidance for full-year pre-tax profit of $8.5bn to $9.5bn.
The new version of the F-150 pickup truck, a refresh of the long-running model, is delivering record transaction prices but did not significantly affect the second-quarter results. Ford built 25,000 fewer F-150 units year on year as production increased to full capacity.
Michelle Krebs, analyst at AutoTrader.com, said the second-quarter performance was “extremely impressive” given that the aluminium-bodied F-150 was not yet in full supply.
“The second half for the Ford F-150 is promising: bigger supply, strong demand, high prices entering the best time of the year to sell trucks,” she said.
Ford, along with several manufacturers in North America, is struggling to supply customers promptly. The carmaker is cutting the summer break at many of its North American plants from a fortnight to a single week.
Ford shares were up 1.1 per cent to $14.74 in New York at midday.
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