Ford dented by Asian rivals

13 April 2012

FORD today heaped further misery on the motor industry, saying first-quarter profits slumped by more than a third. Sales of cars and trucks crashed as it lost out to Toyota and other Asian manufacturers in the battle for the US market.

The company is cutting its North American production to reduce bloated stocks of unsold vehicles.

In Europe, Ford's Premier Automotive Group - owner of the Jaguar, Aston Martin and Land Rover marques - recorded losses of $55m (£28.9m) against a $33m profit a year ago. Overall, Ford profits fell to $1.21bn from $1.95bn a year earlier.

News of the extent of the second-biggest US motor manufacturer's troubles came after speculation that General Motors may have to file for Chapter 11 bankruptcy protection in the US.

GM yesterday reported a $1.1bn loss. It's plunge into the red in the three months to March is its worst result since the company flirted with bankruptcy in 1992. It compared with a $1.28bn profit in the same three months last year and would have been worse but for continuing profits from financial services.

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A slump in US sales was the main culprit, with the share of GM's Buick, Chevrolet and Cadillac marques standing at an 80-year low. 'We expected a difficult quarter and that's what we saw,' said finance chief John Devine.

GM shocked analysts by withdrawing its guidance for full-year profits, issued only last month. The car maker said the spiralling cost of healthcare continued to cloud the outlook for earnings.

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