Car giant unveils earnings fall

Losses by the owner of British-made upmarket car brands Jaguar and Land Rover contributed to a 38.5% fall in first quarter earnings at Ford, it emerged today.

The Premier Automotive Group (PAG), which also includes Aston Martin and Volvo, swung to a pre-tax loss of $55m (€41.9m) in the first quarter against profits of $33m (€25m) a year ago.

Jaguar sales were 21% down in the first three months of the year, according to automotive information group Autodata.

A Jaguar spokesman said the costs of refocusing the luxury car marque in the US towards sales of premium models such as the S-Type and the XJ had taken their toll.

He added that the UK premium car market had slowed in the first quarter due to uncertainty caused by the General Election and a tendency against buying luxury cars early in the year.

Ford also attributed PAG’s losses in part to unfavourable currency exchange rates.

PAG employs about 16,500 staff in the UK at sites including Solihull and Castle Bromwich in Birmingham, Coventry, Gaydon in Warwickshire and Halewood on Merseyside.

Ford, America’s second biggest car maker, said its first quarter earnings fell 38.5% to $1.2bn (€916m).

The results beat Wall Street expectations, but Ford said it may make losses before exceptional items in the second quarter.

Although the picture was brighter at Ford than at General Motors, which yesterday announced a $1.1bn (€839m) first-quarter loss, Ford reduced its full-year earnings guidance earlier this month by a third and maintained that today.

Ford’s worldwide automotive sector reported a pre-tax profit of $579m (€442m) in the first quarter, excluding special items, down sharply from $1.25bn (€954m) a year ago.

Worldwide automotive sales for the quarter fell 4% to just above 1.7 million vehicles.

Ford Europe reported a pre-tax profit of $59m (€45m), up from $5m (€3.81m) last year. The improvement mainly reflected higher volumes and cost cuts, Ford said.

Ford’s pre-tax profit from its North American automotive business was $663m (€506m), excluding one-off items, down from $1.3bn (€992m) a year ago.

The group’s US sales were down 4% for the first three months of this year. The group enjoyed modest success with its car sales, which rose by 5% from the same quarter a year ago, but truck sales fell off by 7.9%.

Ford employs around 14,200 people in Britain at sites including its UK head office at Brentwood, Dagenham, Bridgend in south Wales, Southampton, Halewood, Dunton in Essex, Daventry and Leamington.

Despite launching a range of new vehicles in the past year, Ford and GM have struggled with medical and raw material costs and heavy competition from overseas car makers, particularly Asian brands such as Toyota and Nissan.

Ford chairman and chief executive Bill Ford said the group would continue measures to boost its finances and speed up new product development, although he did not give details.

“We will continue to focus on improving our quality, lowering our costs and delivering exciting new products,” he said.