DEARBORN, Michigan - Ford growing ambitious plans in Asia took a toll on its second quarter profit, higher-cost to develop and sell cars set off increasing sales.
Profit of the company fell 8 percent to $2.4 billion for the period from April to June. Ford higher prices for steel and other commodities blame, but also said that strong after years of restructuring, the company is enough to spend heavily to future growth. Ford spent $ 400 million to engineering and advertising new vehicles more than a year earlier.
"This is the new thing for Ford, we invest in the future," said Ford Chief Financial Officer Lewis booth.
Rival Chrysler Group reporting took a hit, also a loss of $370 million for the quarter. Like Ford, Chrysler that loss was a sign of a healthier balance sheet said. Without a 551 million US dollars accounting fee for refinancing bailout debt to the Governments of United States and Canada would have earned the Chrysler $ 181 million.
Ford's global sales rose by 7 percent. Sales rose 13 percent $ 35.5 billion. But the company warned last month that slides could their net income, citing investment in future products.
Investment in Asia is the next step in President and CEO Alan Mulally's plan of the company in the vicinity of move collapse in 2006, when it took newly structured from $23 billion in the form of loans. Since then, it has costs lower and resulting in nine just sunk billions in the improvement of Ford cars, quarterly profits. Now, the company wants to expand its business in Asia, where it is dwarfed by General Motors co.
Ford is planning the introduction of 15 cars in India and China over the next four years, and therefore it is spending hundreds of millions more in product development than a year ago. In Asia, Ford reported a pre-tax profit of only $1 million, $ 112 million from the same period last year. The company has also a hit, because some of the hottest cars are smaller and less profitable Figo in India as its older models, such as the $8,000. It hopes to make for that by selling more cars.
Now, a stroke of luck may later be an investment for Ford. GM sold three more cars in China than Ford in Asia will time and GM one 600 million dollars profit at their international posted - including Asia - in the first quarter. Ford currently less than 3 percent of the market in India and China controls, but want to increase sales by 50 percent by mid decade.
Ford also said that it is more issues for the production to post-recession more cars are expected to demand in the United States, where people buy nearly 2 million this year are as last year. Ford projects, the annual U.S. sales in the lower end of its 13 to 13.5 million forecast. The company lowered its forecast for European sales, which have been weakened by the debt crisis in the current quarter. Ford now expects sales not higher than 15.3 million vehicles, down from 15.5 million.
A lack of discounts was softened a reason, sales in the United States. Ford and Chrysler were higher prices for their cars and trucks last quarter, partly due to the tight supply of Japanese cars after an earthquake in this nation command.
Average selling price of Chrysler's almost 5 per cent on the previous year climbed above $29,964 at the Ford Automotive Web site increased by 1 percent to $31,179, according to Edmunds. Less on discounts and other offers spent both.
While Chrysler will pay from their government loans was focus, Ford paid his own debts amounting to $ 2.6 billion in the quarter. The company has now caused $14 billion, a legacy of the restructuring of the 2006 Ford hopes that its steady decline in the debt will convince rating agencies to return to the company for investment-grade status, which would make it cheaper money.
Ford may not long to wait. Standard and poor's rating service, said the company's "Financial performance is tracking level with a higher rating" Although it is said to wait, Act up Ford contract talks with the United Auto Workers Union is completed. Ford and the UAW are expected to kick off negotiations on a new four-year contract on Friday.
GM is scheduled in the second quarter profit Aug. 4 release.
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