Ford Says Brexit Could Cost It $1 Billion in Next Three Years
Despite a great first half, Ford’s earnings and sales are slowing. Part of that has to do with incentives, part of that has to do with dipping or leveling interest, and part of that has to do with overseas economics.
Ford dropped its projections last year after the official numbers for Q2 came in. Ford now expects to sell between 17.4 million and 17.9 million vehicles rather than 17.5 million to 18.5 million. According to Automotive News, much of the reason Ford posted a nine percent drop in second-quarter net income has to do with massive incentives cutting into profits.
“We remain committed to our 2016 guidance, but we’re facing risks to achieving that,” Ford CEO Mark Fields said. “We’re seeing more pressure throughout the business for the remainder of this year, so as a result, we’re calling for the second half of this year, and particularly the third quarter, to be much weaker than normal.
Ford reportedly spent $2.2 billion more in the first half this year than in the same time period last year. Part of that is because of the lack of incentives for the first year of the new F-150 last year.
When the U.K. decided to leave the European Union in late June, that also put an arrow into Ford’s ballooning numbers. Ford is reportedly hunkering down with the expectations that the shift in that market could cost the automaker up to $200 million during the remainder of this year and possibly $500 million each of the next two years.
Guess they’ll just have to build a new F-150 Lightning and a Bronco to make up the difference …
via [Automotive News]