DEARBORN, Michigan, USA-Ford's ambitious plans for growth in Asia, the toll on its second-quarter profit, with a higher cost to design and sell car offset the increase in sales.
The company's net profit fell 8 percent to $ 2.4 billion for the period April-June. Ford blamed the higher prices of steel and other commodities, but also said that the company is after years of restructuring, strong enough, to spend heavily on future growth. Ford spent $ 400 million on new vehicle engineering and advertising than the year before.
"This is news for Ford that we invest in the future," said Ford Chief Financial Officer Lewis Booth.
Rival Chrysler Group also hit, reporting a loss of $ 370 million for the quarter. Like Ford, Chrysler announced that the loss was a manifestation of a healthier balance sheet. Royalty accounting 551 million for the refinancing of a bailout for the debts of the Governments of the United States and Canada, Chrysler would have earned $ 181 million.
Worldwide sales of Ford was 7 percent. Revenue rose 13 percent to $ 35.5 billion. But the company last month that its profits would slip by, citing the investment in future products.
Investment in Asia, is the next step in the President and CEO Alan Mulally in a plan to move outside the company near collapse in 2006, when it took in $ 23 billion in loans for the restructuring. Since then, reducing costs and sunk billions into the improvement of the wagon Ford, resulting in nine straight quarterly profits. Now, the company aims to extend its activities in Asia, where is the Akha General Motors co.
Ford plans to the implementation of the 15 cars in India and China over the next four years, and consequently spends millions more in product development than the year before. In Asia, Ford announced a pre-tax profit of $ 1 million, with $ 112 million from the same period of last year. The company also took a hit, because some of the prettiest cars are smaller and less profitable than its older models, such as Figo $ 8,000 in India. Hopes to make it, the more cars.
Investment now could mean a gift, and later for Ford. GM sells three more cars in China than in the whole of Asia, Ford, and GM has shown a profit of 600 million dollars in its international operations, including Asia-in the first quarter. Ford currently controls less than 3 percent of the market in India and China, but wants to increase its sales by 50% by mid-decade.
Ford also said it is spending on production to adapt to the demand in its early in the US, where it is expected to almost 2 million people to buy more cars this year than last year. Ford projects in the lower end of its forecast 13 to 13.5 million annual sales in the us. The company has reduced its forecast for the European sales, which have been weakened by debt crisis in the last quarter. Ford expects the sale shall not be more than 15,3 million vehicles, down from 15.5 million.
One of the reasons for the sale of the softer in the US was the lack of discounts. Chrysler and Ford have managed to bring higher prices for their cars and trucks last quarter, partly due to the small stocks of Japanese cars after the earthquake in the country.
Chrysler is the average sales price increased by almost 5% from a year earlier to $ 29,964 and Ford rose 1 percent to $ 31,179, according to Edmunds.com Automotive Web page. The two spent less on discounts and other shops.
While Chrysler was focused on paying off its Government loans, Ford paid $ 2.6 billion of its own debt during the quarter. The company now has a $ 14 billion in debt, heritage 2006 restructuring. Ford hopes that his gradual reduction of the debt will be to convince rating agencies to return the company to investment grade status, which would be cheaper to borrow money.
Ford may have to wait long. Standard and poor's ratings services said the companies ' financial performance is the monitoring of levels with a higher rating, "Although it said it is waiting to act until Ford completion of the contract talks with the United Auto Workers Union. Ford and the UAW are expected to start negotiations on a new four-year contract Friday.
GM is scheduled to release its profit for the second quarter ended 4.
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