You are here

Ford may exit some markets in South America: JPMorgan

FILES-US-AUTOMOBILE-SALES-153730.jpg
Ford Motor is on the verge of taking dramatic action to turn around its money-losing business in South America, including possibly exiting some markets in the region, a JPMorgan analyst said after meeting with two of the company's top executives.

[SOUTHFIELD, Michigan] Ford Motor is on the verge of taking dramatic action to turn around its money-losing business in South America, including possibly exiting some markets in the region, a JPMorgan analyst said after meeting with two of the company's top executives.

"Ford seems to be working on an out-of-the-box transformational plan to stanch what it deems as unacceptable losses in South America, which we suspect could be announced over the short-term," auto analyst Ryan Brinkman wrote in a note to investors Tuesday.

He said the company may work more closely with rival automakers, "perhaps even via some sort of formal tie-up. It could also entail selective exits from certain markets".

South America remains important to Ford's business operations and the company will continue to focus on making it "operationally fit", spokesman Said Deep said in an email.

sentifi.com

Market voices on:

Battered by economic and political crises in South America, Ford has struggled to earn money in the region. In the first nine months of the year, the automaker lost US$587 million in South America, though that was an improvement on 2016 as it boosted revenue on stronger sales and pricing.

Still, most of the industry's recovery on the continent is coming from low-margin fleet sales, Mr Brinkman wrote after meeting with chief financial officer Bob Shanks and president of global markets Jim Farley.

General Motors shut down operations in Venezuela this year after the government seized its factory there.

Ford, which has a factory in Valencia, "is dedicated to doing whatever it takes to stanch the unacceptable losses in the region," Mr Brinkman wrote.

BLOOMBERG

grab

Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.

Find out more at btsub.sg/promo

Powered by GET.comGetCom