The well acclaimed auto maker in the U.S., Ford (F, Financial), began this year on a positive note by announcing a 20% hike in dividend which was not very much expected by the investors. Though the earnings fell in 2014 for the auto giant, it was able to keep its position as the top player in the U.S. auto industry. Let’s check out what are the predictions on Ford’s luck in 2015 as it begins the year by rewarding the investors.
The truck industry is waiting for the best to come in
In the year 2014, Ford saw a drop in sales for a few months and that was mainly due to the Dearborn plant that was prepping up for the launch of the F-150 truck which has been commendable in the U.S. for over a decade. Now with the truck becoming lighter by use of aluminium, Ford is confident of reaping huge returns this year when the new F-150 will hit the international markets.
Also the current drop in oil prices is something which will aid the truck sales to move further to create a new peak for the auto maker. The decline in gasoline prices could serve as a tailwind to pull up sales of trucks as buyers would divert their attention to the truck segment. This in turn could impact the earnings made by Ford from this segment in the long run.
Growth in emerging markets will drive the sales chart
Along with other Detroit makers, Ford posted good returns from China and recently in a Reuters report it has been indicated that it has sold nearly 1.1 million vehicles in the country last year, which was a 19% increase year-over-year.
In the month of December, Ford sales was up 13% from the year earlier. This followed the 2% rise in November and the 1% fall in October sales. The company did accept that the sales in China had been constrained by the shortage of manufacturing capacity and to take care of such a problem, it was investing hugely to set up additional plants in China.
John Lawler, CEO of Ford China, stated – “Crossing the million vehicle mark is a significant milestone for Ford in China, and it demonstrates the appeal of our portfolio of high-quality, safe, fuel-efficient and smart vehicles… We look forward to continued growth as we expand production capacity and introduce great new Ford vehicles to serve our Chinese customers.”
Since Ford is spending billions of dollars and is introducing a slew of new and redesigned vehicles to build its market share in China, analysts are of the opinion that Ford’s presence in the nation would just get stronger this year after it unveils the new seven seat SUV, the Everest, sometime this year. It is heard that the company has also decided to launch the redesigned Escort, Taurus and three-row version of the Edge for the Chinese car-buyers.
Through the Lincoln brand that Ford introduced in China in 2014, it aims to sell 150,000 units annually under the brand by 2020 and to achieve this target it is aggressively pushing for new dealerships for the brand that stood at six as on early December of 2014.
Final word
With a great entry into 2015, Ford has made investors more confident on its future prospects as an auto maker. Also its management is keen to keep the stand as the best auto maker in the U.S. and to create a niche in other markets with special emphasis on China which is the second largest auto hub after the U.S. As we move on in 2015, there would be further news to be shared on Ford’s investment moves and its upcoming models that could drive its top line significantly in the long term. Also, the future for the new F-150 truck would be unravelled this year. So, let’s stay tuned and keep watching!
