Ford has choppy first quarter as China profit slumps

Ford Motor Co's first-quarter profit in Asia fell as competitive pressures in the region took a toll.

Ford's overall results saw profit decline 35 percent from the year-ago period, the company announced on Thursday. The second-largest US automaker had warned investors in March that higher costs and lower sales volumes would hinder quarterly earnings.

In Asia, Ford said it earned a pre-tax profit of $124 million compared with $220 million for the same period last year. Ford said China drove the decline in profit before tax due to negative industry pricing and a weaker yuan.

Ford's equity income in China slumped 38 percent to $274 million from $443 million in the 2016 quarter.

"The Chinese market is fiercely competitive and competition has gotten better from some local firms there plus the Western firms are all trying to stay noticed too," David Whiston, auto analyst with Morningstar Inc said in an email. "Consumers have a ton of choice so discounting can be a problem and that seemed to pick up a lot in 2016 and has continued into 2017. The pricing issues are not unique to Ford; it's an industry-wide issue."

For the rest of the year in Asia, Ford continues "to expect profits to improve from 2016 due to higher volume. Net pricing will be lower due to negative industry pricing in China, while exchange expected to be unfavorable due to weaker RMB (yuan)," the company said in a statement.

For the quarter, Ford reported a net income of $1.59 billion, or 40 cents a share, down 36 percent from $2.45 billion, or 61 cents per share, a year earlier. On average analysts were looking for earnings of 35 cents a share. Revenue rose to $39.1 billion from $37.7 billion a year ago.

General Motors, the largest American automaker, is scheduled to report its first-quarter results on Friday.

paulwelitzkin@chinadailyusa.com