Ford’s ambitious Asia plans take toll on 2Q profit
DEARBORN, Mich. (AP) — Ford’s ambitious plans to grow in Asia took a toll on its second-quarter profit, with higher costs to design and sell new cars offsetting rising sales.
The company earned $2.4 billion, or 59 cents per share, down 8 percent from $2.6 billion, or 61 cents per share, a year earlier.
Ford Motor Co. warned last month that its profit could slip, citing investments in future products. Worldwide sales rose 7 percent, but the company spent $400 million more than it did last year to engineer and advertise new vehicles.
In Asia, it plowed money into new cars and trucks. The result was a pretax profit of just $1 million, down $112 million from the same time last year. Ford is spending millions to introduce 15 cars in India and China over the next four years.
Ford Chief Financial Officer Lewis Booth said that after years of restructuring and the recession, the company is strong enough to invest more heavily in future growth.
Ford controls less than 3 percent of the market in both India and China, but wants to increase its sales by 50 percent by mid-decade. By comparison, it held 17 percent of the North American market and 8 percent of the European market in the first quarter. But both of those markets saw softer sales in the quarter because of the economy and earthquake-related car shortages, Booth said.