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Ford says driverless car spending to hit 2017 profit
[NEW YORK] Ford Motor Company on Wednesday said its pre-tax profit would decline for a second straight year in 2017 as the company invests heavily in electrified and driverless cars.
But the company said earnings would improve again in 2018 on plans to achieve US$3 billion in annual savings to help offset design and regulatory costs.
The company estimates that 2016 results will be US$10.2 billion, 5.5 per cent lower than last year's record 10.8 billion.
The news comes a week after the company announced an expanded US$640 million recall to replace faulty door latches on an additional 1.5 million cars.
Ford did not give a precise figure for how much more profits could fall in 2017.
"The decline in 2017 is the result of increasing investments and costs for emerging opportunities," the company said in a statement.
The company plans to invest US$4.5 billion in developing 13 electrified cars, representing 40 per cent of its lineup, for release by 2020, with a high-volume, fully autonomous car available for ride-sharing by the following year.
Ford reported a 5 per cent drop in monthly sales for August and said in July that a cooling US auto boom could affect 2016 profits.
Shares in the company were trading lower on Wednesday morning, down 0.9 per cent over Tuesday's close on the New York Stock Exchange toward 1430 GMT.