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Bill Ford: "fairly large" changes coming, probably means South America is terminado...


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22 replies to this topic

#1 OFFLINE   bzcat

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Posted 09 May 2018 - 03:04 PM

An under-reported point mentioned in the earnings call last week was that Ford put the South America operations "on review".

 

Sounds like that review is reaching to some conclusion soon...

 

https://www.reuters....r-idUSL1N1SG14C

 

 


DETROIT, May 9 (Reuters) - Ford Motor Co shareholders should expect “fairly large” changes in the coming year, Executive Chairman Bill Ford Jr. told Reuters, building on the automaker’s moves to discontinue some North American models and boost electric vehicle investment.

 

The automaker has promised to cut costs overall but still faces questions about lagging performance in certain regions and calls for more details on its restructuring. Its shares tmsnrt.rs/1Nxqa9k have barely budged since Chief Executive Jim Hackett took the helm last year.

 

It could be regions, it could be functions, it could be areas of emphasis,” Ford said in an interview. “We’ve done some big things, and we still have some big things to do.”

 

The automaker lost $4 billion in South America from 2013 through the first quarter of this year, and its chief of global operations said in January it was “exploring every option you can imagine.”

Analysts have also urged an overhaul of European passenger car operations to help Ford reach its 8 percent pre-tax profit margin goal.

 

Bill Ford said the automaker will be able to use cost savings to return cash to shareholders, invest in new technology and businesses and fund restructuring.

 

Reading between the lines, I'm guessing Ford will be selling its South American operations to someone... but who? Perhaps one of the Chinese car companies.


Edited by bzcat, 09 May 2018 - 03:21 PM.

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#2 OFFLINE   silvrsvt

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Posted 09 May 2018 - 03:06 PM

Guess Troller would be toast then.


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#3 OFFLINE   bzcat

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Posted 09 May 2018 - 03:20 PM

I'm guessing Troller is not even a rounding error on Ford's losses in South America.

 

I'm not saying it is the right decision but exiting South America entirely has the same kind of rationale as exiting cars in North America:

 

1. Ford is not a top 3 player in the region.

2. South America products preferences do not align with the rest of the world where Ford operates.

3. Investments in South America centric or specific models will not generate a higher return than investing in China (or US) centric or specific vehicles.



#4 ONLINE   atomcat68

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Posted 09 May 2018 - 03:32 PM

I think it is a bad idea to just cut and run from an entire market. The market could be a growth are in another decade or so, and starting over is very hard. Just ask Alfa Romeo and their plan to sell enough cars to compete with BMW. 

 

Clearly some thinking outside of the box must be done. What I'd do if Ford really needs to sell of its South American operations, try to sell it to a automaker with no presence in South America like one of its Chinese partners. Then see if they'd go for a deal where they could take out a license on putting the ford brand name on a certain percentage of cars they make to be sold along side their brand in the dealer network. They may go for it as their brand would need to get started and selling along with a small amount of Ford branded cars may help transition people over to the new brand while keeping the Ford name active incase a comeback is warranted. Ford could even offer to sell a halo car like the Mustang in the dealer in small numbers. The risk to Ford would be minimal as they no longer own the factories, and if the brand name is damaged by sub par cars... well, they were going to exit anyway. Electronics are often sold the same way as GE and Rca don't make consumer products, they license their name to companies who wouldn't be known and would have a hard time penetrating the market.


Edited by atomcat68, 09 May 2018 - 03:33 PM.

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#5 OFFLINE   2b2

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Posted 09 May 2018 - 04:16 PM

[url=""]

...Asia's crowded

And Europe's too old
Africa's far too hot
And Canada's too cold
And South America stole our name...[/url]


Edited by 2b2, 09 May 2018 - 04:17 PM.

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#6 OFFLINE   RadicalX

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Posted 09 May 2018 - 05:33 PM

Very sad. Here in Brazil, the Ford Ka is the third best-selling model. The Mustang is the best-selling sport vehicle in the country
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#7 OFFLINE   bzcat

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Posted 09 May 2018 - 05:34 PM

I think it is a bad idea to just cut and run from an entire market. The market could be a growth are in another decade or so, and starting over is very hard. Just ask Alfa Romeo and their plan to sell enough cars to compete with BMW. 

 

 

South America is growing... for everyone else. That's the problem. Ford South America has been stagnant for decades due to disinterest and lack of investment and Ford's business has been weakened to the point now that it is an open question whether the investment to resurrect it is worth it... Ford basically has to relaunch the brand there with all new products.

 

Ford was the #2 player in South America after VW in the 1980s

Then GM passed it in the late 1980s after the ill-fated Autolatina Ford-VW merger.

Then FCA passed it in the 1990s.

Then Renault-Nissan passed it in the 2000s.

Then last year, Toyota passed Ford in South America.

And so far this year, Hyundai is neck and neck with Ford. And Honda is already ahead of Ford in Brazil, the largest market in South America.

If PSA wasn't such a basket case, they would have passed Ford too.

 

Ford has lagged behind everyone in making cheap low cost cars, which is also the reason why it is lagging in China and India and ASEAN. EcoSport was a real hit but that was it.


Edited by bzcat, 09 May 2018 - 05:34 PM.

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#8 OFFLINE   RadicalX

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Posted 09 May 2018 - 05:36 PM

In fact, Ford Brasil has already announced investments in a traditional plant for the construction of a new Dragon 1.5 engine. Outside that here are manufactured cars that are exported to Argentina, such as Sport and Ka, which by LA, the Ka is the second best selling of the whole market, and the sport is the best selling SUV in Argentina
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#9 OFFLINE   RadicalX

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Posted 09 May 2018 - 05:37 PM

Very sad. Here in Brazil, the Ford Ka is the third best-selling model. The Mustang is the best-selling sport vehicle in the country

#10 OFFLINE   bzcat

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Posted 09 May 2018 - 05:42 PM

I'm sure jdp will recognize the similar path Ford South America experienced in the last 25 years with that of Ford Australia.

 

Almost exactly the same story... went from market leadership (#1 or #2 position depending on which year) and let it wither until it is almost not worth saving.



#11 OFFLINE   RadicalX

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Posted 09 May 2018 - 05:42 PM

 
South America is growing... for everyone else. That's the problem. Ford South America has been stagnant for decades due to disinterest and lack of investment and Ford's business has been weakened to the point now that it is an open question whether the investment to resurrect it is worth it... Ford basically has to relaunch the brand there with all new products.
 
Ford was the #2 player in South America after VW in the 1980s
Then GM passed it in the late 1980s after the ill-fated Autolatina Ford-VW merger.
Then FCA passed it in the 1990s.
Then Renault-Nissan passed it in the 2000s.
Then last year, Toyota passed Ford in South America.
And so far this year, Hyundai is neck and neck with Ford. And Honda is already ahead of Ford in Brazil, the largest market in South America.
If PSA wasn't such a basket case, they would have passed Ford too.
 
Ford has lagged behind everyone in making cheap low cost cars, which is also the reason why it is lagging in China and India and ASEAN. EcoSport was a real hit but that was it.

Ford has fluctuated between the fourth and sixth position in recent months because the sales figures of the manufacturers are very close to each other
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#12 OFFLINE   RadicalX

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Posted 09 May 2018 - 05:58 PM

Guess Troller would be toast then.


Troller T4 sells very well! It has great appeal for individuals and fleet here in Brazil. is a brand recognized by robustness

#13 OFFLINE   RadicalX

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Posted 09 May 2018 - 06:03 PM

What brought big and serious damage to Ford in South America, were the replacements of DCT Powershift in focus, Ecosport and Fiesta since 2013, year of its debut in the south america market through Argentine and Brazilian factories. There were a lot of cases of trouble in the Powershift. For Ford to improve, she already has a new exchange, the 6F15 that will debut soon in the Ka. It's just a matter of time to grow back. Here in Brazil the Mustang has been recovering the Ford image Also

#14 OFFLINE   RadicalX

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Posted 09 May 2018 - 06:07 PM

Here in Brazil, the market for large sedans (called midsize sedans in the US) is falling, where Fusion was a leader, and being replaced by the midsize SUVs market (called SUVs Compacts in US). The compact hatches market is dead in Brazil, where Focus was a leader. Here, Ford should urgently bring Escape/Kuga if it wants to recover territory

#15 OFFLINE   2b2

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Posted 09 May 2018 - 09:52 PM

South America is growing... for everyone else. That's the problem. Ford South America has been stagnant for decades due to disinterest and lack of investment and Ford's business has been weakened to the point now that it is an open question whether the investment to resurrect it is worth it... Ford basically has to relaunch the brand there with all new products.

 

Ford was the #2 player in South America after VW in the 1980s

Then GM passed it in the late 1980s after the ill-fated Autolatina Ford-VW merger.

Then FCA passed it in the 1990s.

Then Renault-Nissan passed it in the 2000s.

Then last year, Toyota passed Ford in South America.

And so far this year, Hyundai is neck and neck with Ford. And Honda is already ahead of Ford in Brazil, the largest market in South America.

If PSA wasn't such a basket case, they would have passed Ford too.

 

Ford has lagged behind everyone in making cheap low cost cars, which is also the reason why it is lagging in China and India and ASEAN. EcoSport was a real hit but that was it.

imho this sounds pitiful

to the point I wonder if Ford is planning on their Chinese masters/partners taking over all entry business globally?


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#16 OFFLINE   mackinaw

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Posted 09 May 2018 - 10:20 PM

Big growth in the future will most likely be in China and India, not South America.  



#17 OFFLINE   jpd80

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Posted 10 May 2018 - 02:14 AM

I'm sure jdp will recognize the similar path Ford South America experienced in the last 25 years with that of Ford Australia.

 

Almost exactly the same story... went from market leadership (#1 or #2 position depending on which year) and let it wither until it is almost not worth saving.

The difference is the product mix.

Around 70% of FoA's sales come from Mustang + Ranger + Everest with an average transaction price well over AUS $55K.

Thatt is far and away differnt to stakcing your house with Ka and other low cost vehicle sales.

 

 

"Rumor" has it that FoA had a very good year profit-wise last year but now that's all bundled into Asia Pacific, India and China,

we don't see area specific so it's assumed that an area getting a relative handful of sales is well, doubtful.....

Remaining cars and Utility sales are low/terrible because that are old compared to the competition

remember our global Ford's are evolutions of old models we've had since the 2000s.


Edited by jpd80, 10 May 2018 - 02:24 AM.

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#18 OFFLINE   justins

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Posted 10 May 2018 - 06:07 AM

The difference is the product mix.

Around 70% of FoA's sales come from Mustang + Ranger + Everest with an average transaction price well over AUS $55K.

Thatt is far and away differnt to stakcing your house with Ka and other low cost vehicle sales.

 

And I think if FoA can overcome the bad image Focus has thanks to DCT debacle, it may be seen as a Golf competitor rather than a Corolla / Astra competitor. We've already seen Holden announce the spark is gone, with sales expected to come from base Astra, while FoA have said there won't be a bargain basement, price leader Focus.

 

Problems for FoA are Escape and Ecosport - both booming segments and FoA going nowhere quickly. Escape isn't bad, but Ecosport is outclassed by basically everything.


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#19 OFFLINE   rmc523

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Posted 10 May 2018 - 09:21 AM

 

And I think if FoA can overcome the bad image Focus has thanks to DCT debacle, it may be seen as a Golf competitor rather than a Corolla / Astra competitor. We've already seen Holden announce the spark is gone, with sales expected to come from base Astra, while FoA have said there won't be a bargain basement, price leader Focus.

 

Problems for FoA are Escape and Ecosport - both booming segments and FoA going nowhere quickly. Escape isn't bad, but Ecosport is outclassed by basically everything.

 

Unfortunately , that seems to be global issue aside from the markets it was originally intended for.  The refresh has helped, but the only true fix will be a next gen model and/or outright replacement (baby Bronco?) in certain markets.


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#20 OFFLINE   bzcat

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Posted 10 May 2018 - 12:38 PM

The difference is the product mix.

Around 70% of FoA's sales come from Mustang + Ranger + Everest with an average transaction price well over AUS $55K.

Thatt is far and away differnt to stakcing your house with Ka and other low cost vehicle sales.

 

 

"Rumor" has it that FoA had a very good year profit-wise last year but now that's all bundled into Asia Pacific, India and China,

we don't see area specific so it's assumed that an area getting a relative handful of sales is well, doubtful.....

Remaining cars and Utility sales are low/terrible because that are old compared to the competition

remember our global Ford's are evolutions of old models we've had since the 2000s.

 

that's true... Ford can resurrect Australia and New Zealand fairly easy with more SUVs and expanding Ranger line up.

 

South America is a little tough in that the vehicles that sells there are small and cheap... something Ford doesn't do very well. Ford has had similar problems with India and ASEAN... they just can't come up with the right kind of vehicles for those markets.


Edited by bzcat, 10 May 2018 - 12:38 PM.









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