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Ford has best 1st quarter in 13 years
ASSOCIATED PRESS
Photo
In this Jan. 11, 2010 file photo, a 2011 Ford Fiesta is displayed at the North American International Auto Show, in Detroit. Ford posted its best first-quarter profit in 13 years, as its new, more fuel-efficient vehicles reached showrooms during a surge in gasoline prices. New arrivals such as the Ford Explorer and Fiesta small car are selling well.
Associated Press
DEARBORN, Mich.
Ford posted its best first-quarter profit in 13 years, thanks to an improving economy and a lineup of fuel-efficient vehicles that reached showrooms as gasoline prices surged.
New arrivals such as the Ford Explorer — which gets 20 percent better fuel economy than the old version — and the 40-mile-per- gallon Fiesta subcompact are selling well in the United States. Company profits are growing around the world. And Ford is charging more for its cars, helping offset the higher costs of steel and other materials.
The outlook for the rest of the year also is positive. Ford likely can keep its prices high because of earthquake-related shortages at rivals such as Toyota. Consumer confidence is growing, so buyers are more willing to invest in a new car. Ford predicts U.S. sales will rebound from a 30-year low of 10.4 million in 2009 to about 13 million this year.
On Tuesday, Ford Motor Co. said net income rose 22 percent to $2.6 billion, its best first-quarter performance since 1998. It was the company’s eighth- straight quarterly profit in its long climb back from near-bankruptcy five years ago.
Ford’s revenues rose 18 percent to $33.1 billion. The company saw especially strong growth in Asia, where revenues jumped 31 percent to $2.1 billion. In India, sales more than doubled, thanks to the popularity of the $8,000 Figo subcompact.
“Our team delivered a great quarter, with solid growth and improvements in all regions,” Ford President and CEO Alan Mulally said.
With a strong lineup of relatively new small and midsize cars, Ford is in a good position as rising gas prices push drivers into smaller vehicles. The average price of a gallon of gas in the U.S. is now $3.87, up $1.03 from a year ago. Ford’s newest small car, the redesigned Focus, can get up to 40 mpg on the highway.
Ford’s bigger vehicles also are more efficient. Ford’s F-Series pickup, the company’s best-selling vehicle, now has a more-efficient V-6 engine; around 37 percent of buyers chose that engine in March. Customers switching from a truck-based 2010 Explorer to the less-expensive, car-based 2011 Explorer can save about $500 in gas each year, according to government fuel-economy calculations. The revamped SUV is lighter and gets about 25 mpg on the highway.
Once, a shift to smaller vehicles would signal trouble for Ford, since it makes lower profits on them. But the profit gap between big and small is narrowing as buyers put more-expensive options in compacts. One of the most-popular options people are adding to the $16,695 Fiesta SEL is heated leather seats for $795. Such luxurious trimming was unheard of in small cars a decade ago, but it’s the new reality as downsizing baby boomers demand more amenities and young buyers shell out money for perks such as entertainment systems.
The average price of a Ford vehicle increased $2,515 to $33,173 in the first quarter, according to auto pricing site TrueCar.com. That was $3,000 more than the average price for the industry.