Ford Motor Company (F)

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Ford Exec Expects US Auto Sales To Top 17 Million In 2015
Ford America's president, has revealed company plans to improve productivity in anticipation of 2015 US auto sales
Published: September 26, 2014 at 4:01 pm EST
By: George Zack
In an interview on CNBC, Ford Motor Company's (F) America president, Joseph Hinrichs, shared his expectations for the US auto industry in 2015. According to Hinrichs, US auto industry sales in 2015 might reach 16.8 to 17.5 million, considering favorable interest rates and economic growth. He also mentioned that some even anticipate the number to top 18 million units. This will break the sales records of the past 14 years
Hinrichs mentioned that Ford is prepping itself to tap into this market. Further views on Ford’s future performance expectations will be discussed during Investor Day Ford’s Current Sales Performancepresentations on Monday.
Ford’s Current Sales Performance
For the first quarter of 2014, Ford Motors recorded strong sales volume, along with a 6% increase in revenue, beating analysts' expectations. However, most sales were generated from the Asia-Pacific region. In China, Ford’s market share rose by 3.4%, whereas the North American region registered a 5% drop in revenue.

However, second quarter results revealed that its biggest region – the US – showed better results compared to Q1. Pre-tax profits for Ford recorded a 3% increase. The month of August was not stellar for Ford, as it posted 0.4% sales growth in the US automobile market.

Contrary to expectations, the industry research firm, Edmund’s.com, expects Ford to report a 4% drop in sales this September, owing to its preparation for the launch of the 2015 model F-150 pickup truck. In order to support the preparations for 2015, production of the F-150 was cut in 2014.
Increase in Productivity
To reach its goal of improved sales in 2015, Ford is investing $1.1 billion to optimize productivity. As per Ford’s new release yesterday, America’s second-largest car maker plans to hire 1,200 workers for its truck and van factory in Missouri. These new workers will start work from November, working in the second shift. This will enhance the production capability to now almost 500,000 vehicles by the end of 2014.
This is a strategic move to ramp up productivity to tap into America’s growing truck market, registering a 13.32% rise in demand for July
In August 2014, companies in the truck segment witnessed strong growth. Fiat Chrysler (FIATY) truck sales increased by 21%, and General Motors Company (GM) surged 2.7% in the same segment. In September, new car and truck sales recorded a 10% high according to LMC Automotive and J.D. Power. This consistent growth in the truck market highlights the prospects for Ford in the face of increased production.

Fiat S.p.A (FIATY), and Japanese car maker, Mitsubishi Motors Corporation (MMTOF), will be partnering to manufacture mid-sized pickup trucks, based on the upcoming Mitsubishi L200 series. Toyota Motors Corporation (ADR) (TM) and GM have also been quite active in the truck market recently.

Back in 2012, GM abandoned its midsize pickup line, following low demand. However, the company will soon be back in the game in 2015 with low cost Canyon and Chevrolet Colorado midsize pickups.

Ford Motors dropped 1.28% during market hours yesterday, closing at $16.2. However, it gained 0.25% in after-hour market trading to reach $16.24 on the NYSE.

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