Ford Motor company's first quarter profits make interesting reading. It earned 302 million from automotive sales, and 370 million from selling finance packages to it's customers.
Maybe Rover should have become a bank.
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Please dont start on Rovers.Bank or not they failed. see no reason to crucify..
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Steve
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Not a dig, Steve. A (slightly) TiC observation.
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(Sorry, Tom Shaw, what you wrote was libellous. You stated something as fact when what you should have done is alluded to newspaper reports, preferably quoting them. HJ)
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FORD profits ! We have quite enough threads discussing Rover, thank you.
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Different culture in the U.S. They generally finance their cars through the manufacturers as opposed to the local piggy banks as we do here.
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1, Ford is lucky they made any profits on cars - its fairly rare
2, CAr finance has always been every companies cash cow
3, Even Rover, which is why it found a buyer when it was sold off.
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I have many colleagues in the US and, as imagos says, finance is usually via the manufacturer, on a personal lease deal.
I still don't really understand how the US market works, though. New cars seem cheap, and the lease rates are staggeringly low, yet used cars look quite expensive. Perhaps the residual values are set high to keep the lease rates low, yet somebody has to take a hit at some point? I can only think that the finance arms must 'buy' cars at huge discounts, so the profit is transferred from the factory to the finance arm.
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As for me, I'm still looking for the alleged libel.
Or is it pedantry at its finest?
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A couple of years ago, British Airways apparently made more money from the London Eye than all its flying operations.
Quite often the money isn't made on the core product - think electrical goods and extended guarantees, holidays and insurance.
(Motoring Link) You may remember that at an automotive conference last year I heard that more that the workforce healthcare & pension cost to Ford accounts for over $1500 per vehicle. (Think that's right, will have to check notes)
Still, Ford are doing better than GM.
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Legally Ford's finance arm is a separate company. It borrows money to relend to customers to buy Ford cars.
The Finace arm borrows at an interest rate which depends upon its credit rating. The more profit it makes, the better the credit rating it has, the lower the interest it pays on its borrowings and the more profit it makes.
So the Company "sells" its cars to its finance arm cheap cheap...
madf
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Slightly off topic, but apt:
It used to be said the leftover mustard on peoples' dinner plates is what made Colman's Mustard's profits.
cheers, SS
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Well it's a wheel isn't it? They have to make money within the legal framework and so they do. It's not really surprising that they have to find another vessel from which to make money - selling cars is very competitive, everywhere...so if it's finance, thenn hey, so be it.
But yes, buyers in the US have the best rates ofn offer perhaps anywehre in the world - but then the US Government give stax breaks to people who buy vehicles over 6.5 tonnes (if I am not mistaken) which envcourages people to buy that 'bigger' car and thenw rite off as much as 45% of it's value as a 'tax back' when they sell it after some years.
Car ownership? We're not a patch on the Americans - they have got it down to a very fine art - with fuel prices to match! :)
Im not plain stupid, just a special kind of stoopid.
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A few years ago Ford announced that 70% of Ford worldwide profits were generated in the UK. How much of this downturn is due to falling car prices in the UK?
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Most of the Ford profits come from their F Series pick up truck line. Everthing else makes virtually no money.
If those pick up sale were to decline they'll be in serious trouble.
The European car market overall doesnt make much money for the manufacturers. Small car high labour cost. Globally there's an oversupply of 2 million cars most coming from GM and Ford.
Only the Japanese particularly Toyota ($16 billion profits last year) are going against the global trend.
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Only the Japanese particularly Toyota ($16 billion profits last year) are going against the global trend.
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Profits are good at Toyota but sales are falling a little bit in Europe at the moment.
Hyundai, Kia - fastest growing car companies, opening new plants in India and Eastern Europe. They make a profit and now worth more than GM. Ford, GM, VW, Renault and PSA will need to close factories in Western Europe to compete with the Eastern produced cars.
BMW have got great sales so theres at least one European car company going against the trend.
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