Ford Expands Sales Network in India - Analyst Blog
October 22 2012 - 5:50AM
Zacks
Ford Motor Co. (F) revealed that it will expand
sales network in India as part of its major expansion plan in the
emerging countries. It will increase the number of outlets to 500
by 2015 from 230 currently in the country.
Last month, Ford announced plans to boost exports of its engine
production from India by shipping them for the first time to
Europe. Currently, the automaker exports 40% of its Indian-made
engines and 25% of its Indian-made cars to 35 countries.
Ford’s plan to rev up Indian exports is in line with its capacity
expansion programs in the country. The company expects to
manufacture 450,000 cars and 600,000 engines in the country by
2015.
The company has already pumped in $2 billion to build manufacturing
facilities in India. However, it is still lagging behind
Hyundai Motor Co. (HYMLF) and Maruti Suzuki India
Ltd, which occupy the lion’s share in the Indian car market. Last
year, Ford sold 96,270 vehicles, while Hyundai sold 373,709
vehicles in the country.
Earlier this year, Ford unveiled its new global compact sports
utility vehicle (SUV) EcoSport at the 2012 India Auto Expo in
Delhi, which is a part of its plan to roll out eight new models in
the country by 2015. The automaker plans to invest $142 million to
manufacture the SUV at its Chennai plant in south India for the
domestic and export markets.
Currently, Ford builds Figo and Fiesta models at the Chennai plant.
Last year, the automaker announced that it will invest $72 million
to expand production capacity at its power train facility in the
plant in order to support its sales and exports growth. The
investment will enhance the plant’s annual production capacity from
250,000 vehicles to 330,000 vehicles.
Ford is currently pursuing a major expansion plan in the emerging
countries, including Argentina, Brazil, China, India and Thailand.
The company expects that Asia will account for 70% of its global
growth in the next decade, mostly from China and India. It also
anticipates Asian sales volumes to double and account for a third
of its global sales by 2020.
According to Joe Hinrichs, the president of Ford’s Asia Pacific and
Africa region, India will be the third largest market after U.S.
and China by the end of the decade. Currently, Ford occupies about
4% of the Indian market, which is about the same share occupied
General Motors Co. (GM) and Toyota Motor
Corp. (TM).
The Zacks #3 Rank (Hold) company posted a 39% fall in profits of
$1.20 billion or 30 cents per share in the second quarter of the
year from $1.98 billion or 49 cents in the corresponding quarter of
2011 due to lower operating results in all the regions except North
America. However, the company’s profits were higher than the Zacks
Consensus Estimate of 28 cents per share.
Revenues in the quarter dipped 6% to $33.3 billion, due to the same
factors mentioned above. However, it exceeded the Zacks Consensus
Estimate of $32.0 billion. In the first half of the year, Ford’s
U.S. total market share was 15.4% in the U.S. and 8.1% in
Europe.
For 2012, Ford anticipates market share in the U.S. and Europe to
be lower than 16.5% and 8.3%, respectively in 2011. It also expects
the overall pre-tax operating profit to be lower than 2011 compared
with the prior guidance of tallying. Operating margin in the
Automotive segment is anticipated to be equal or lower rather then
the prior guidance of improve over 5.4% in 2011.
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
(HYMLF): ETF Research Reports
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
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