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Much more worrying: vehicle sales in the United States, China and Europe.
It's tempting to think that Ford's Carmageddon is a new "diesel portal" after Ford announced last night that a "handful of employees had expressed concern" about its testing procedures in terms of economy certification. fuel and emission. Of course, Ford could be nailed. We are furiously trying to make the process less painful by announcing a series of actions and signaling this debacle – in fact, the "potential concerns" – to the EPA and the California Air Resources Board rather than hiding it.
Ford may have to pay fines and face legal action. With other manufacturers, it has already been trapped by an exaggerated fuel economy. No problem. He went through these debacles. Volkswagen went through dieselgate. Other manufacturers are using or have already installed their own diesel engines. Corporate mischief can be expensive. But it falls.
The decline in vehicle sales is more difficult to correct.
This scandal is only a gap with Ford's global problem. Sales of its vehicles have been declining in Europe since 2008; they have essentially collapsed in China in the last two years; and they have fallen in the United States in the last three years.
In addition to unveiling the test debacle last night, Ford also filed its annual report (10-K). It contains the audited figures, including global annual sales of vehicles – the number of vehicles that Ford has sold to its dealers (which they then sell and "deliver" to their customers).
Ford sales in China collapsed
Ford's annual sales through its joint ventures in China – by far the largest automotive market in the world where GM sells more vehicles than in the US – peaked at 1.297 million vehicles in 2016 , according to the Ford 10-K report. But by 2018, Ford has only sold 731,000 vehicles. A plunge of 44% over two years.
Among all car manufacturers, the number of vehicles sold in China decreased by 4% in 2018, a solid start being wiped out by a sharp decline in the second half. The year 2017 had been a record year for the automotive industry. For Ford, the two years have been Carmageddon. Its sales in 2018 were hardly superior to its sales in 2012:
US sales of Ford fell for the third year in a row.
In 2018, Ford sold 2.54 million vehicles in the United States, according to its 10-K. This is the third year in a row that sales have decreased, bringing total sales to 5% from the peak of 2015. Sales volume in 2018 is lower than in 2013:
CEO Jim Hackett, whom Ford promoted in May 2017 following his Silicon Valley Smart Mobility concert, enters the analyst and media circuit and presents his turnaround plan for cost reduction and cost reduction. Costs, "Fitness Redesign", according to its predecessor. savagely flogged her arms, planning her own turnaround plan before getting fired. These plans are worth billions of dollars in write-offs.
The idea of Smart Mobility, the former Hackett concert, is to compete with Uber and Google, among other things. The unit houses, among other things, stand-alone companies and a jewel called Chariot Transit, an application-based shuttle service that Ford acquired at the end of 2016. At the time, it was circulating a few vans around San Francisco for technology work locations. It then spread to other cities and countries. It competed directly with city buses. A month ago, the high-tech company was closed. This kind of thing diverts the attention of a car manufacturer.
The long-term decline of Ford of Europe
When the Eurozone went through the financial crisis and the subsequent euro debt crisis, Ford's sales dipped by 37% between 2008 and 2013. They then recovered. In 2018, sales reached 1.44 million vehicles. A feat for a company whose global sales are plummeting. But these 2018 sales were still down 16% from 2008:
Global sales of Ford vehicles fell 10% in two years
Ford sells vehicles all over the world, in North America, South America, Europe, Russia, Turkey, the Asia-Pacific region, the Middle East and Africa. These "Total Company" sales peaked in 2016 and have since decreased by 10% to 5.98 million vehicles. This puts sales just above what they were in 2012 and 2011:
So just increase the prices.
How does Ford try to prevent his dollar sales from following the same path as his unit sales? Price increase. And executives boast of supporting lost actions.
The measure used is the average transaction price – the price at which the vehicle is sold to consumers after the bargain. At the fourth quarter earnings call, Executive Vice President, James Farley, Jr. is touted for the "double-digit transaction price increase in the last quarter" for the Escape models and Focus. and CEO Hackett boasted of the pickup transaction price being "about 2,000 USD above the segment average".
Raising prices on declining volumes to cover declining volumes is not an elegant solution for the long run.
Waiting for spam.
Last August, Moody's brought Ford back to Baa3 with a negative outlook. This is the lowest credit rating assigned by Moody (here is my colorful rating scale for the top three US rating agencies). Moody's spoke of the erosion of Ford's "global business position and the challenges it will face in implementing its fitness restructuring program," which costs about $ 11 billion of dollars.
An "undesirable" downgrade would make the loan more expensive and cause many problems for Ford. So we are trying to keep our margins intact by raising prices and doing something else to convince the rating agencies not to destroy it.
But the real problem lies in Ford vehicle sales. This is the heart of his activity. The fact that Ford seems to have a hard time finding all buyers for its vehicles in China, which in the United States, its sales have been declining for three years and that in Europe, the decline has been going on for more than 10 years: this is the true Carmageddon for Ford, not the evolution of emissions and fuel – scandal of economic fraud, for which it will be struck in the worst case. But with this kind of decline in vehicle sales, year after year, good luck.
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