Ford Motor Co. (F) has decided to boost its production level by 13% in the first quarter of the year on the back of higher demand from its surviving namesake and Lincoln brands. The automaker expects the demand trend to continue for the rest of the year.
In January, Ford’s sales grew 9.2% to 116,534 vehicles driven by strong sales of its trucks and fuel-efficient passenger cars. Truck sales rose 24.6% driven by a 29.6% growth in sales of F-Series pickup.
The month also saw higher demand for Ford products including Explorer sport utility vehicle (SUV). Consequently, the automaker plans to hire additional workers or make the present force go for overtime for building the new Explorer in its Chicago plant. It also plans to employ more than 7,000 workers in the next two years to build several new models including the revamped Ford Escape SUV.
On the other hand, Ford is trying to explore on the sales front as well. Keeping this in view, the company primarily decided to trim its Lincoln dealerships by 25% in its biggest U.S. metropolitan markets to 325 dealers. With this, the company intends to close the gap in sales volume per store with its peers such as Toyota Motor Corp.‘s (TM) Lexus.
Ford has been expanding its luxury Lincoln line-up at the cost of its Mercury line-up, which was phased out at the end of 2010. The company plans to launch as many as 6 new Lincoln models in the next 3 years, including a small car in 2014.
In the last quarter of 2010, Ford introduced the restructured 2011 MKX crossover. The automaker plans to include V-6 engine, advanced fuel-efficient transmissions and EcoBoost engines in all its new Lincoln line-ups.
In October of last year, Ford had discussed with Lincoln regarding the required investment to be made for the upgradation program. Dealers have revealed that the renovations could cost about $2 million per showroom.
Lincoln is the only surviving luxury lineup of Ford after dispensing of other similar lineups, including Jaguar, Land Rover, Aston Martin and Volvo. As a result, Ford expects the brand to compete with other notable luxury lines, such as Toyota Lexus, General Motors’ (GM) Cadillac and Daimler AG’s (DDAIF) Mercedes- Benz.
Ford, a Zacks #3 Rank (Hold) stock, posted a 24% fall in profit to $1.2 billion or 30 cents per share (before special items) in the fourth quarter of 2010 from $1.58 billion or 43 cents per share (before special items) in the same quarter of 2009. With this, the automaker has missed the Zacks Consensus Estimate by 19 cents per share.
The decline in profit was attributable to lower year-over-year revenues generated by the company’s automotive operations as well as the financial arm. Total revenue during the quarter ebbed 7% to $32.5 billion. However, excluding revenues from Volvo, sales improved by $1.6 billion or 5% from the fourth quarter of 2009.
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