International forecasts for Ford (NYSE:F) don’t appear to be getting better, as company predictions for its South American division suggest that the manufacturer may lose as much as $300 million in the region. Coupled with the predicted $2 billion annual loss that the company is expecting from Europe, the next quarter is putting enormous pressure on Ford’s North American and Chinese operations to carry the company through.
“Weakening currency and inflation pressure will challenge our profits and margins in 2013,” Joe Hinrichs, Ford’s president of the Americas, said yesterday at an auto conference in New York. Moves by Brazil and Argentina to limit imports from Mexico also have affected sales of its Mexican-built Fusion and Fiesta cars, he said.
Additionally, sliding currencies in Japan have given Japanese automakers an improved margin when selling vehicles abroad, bringing the threat to a domestic level. The company expects to break even in the South American and Asian markets, making it additionally crucial that growth in the United States remains strong for the company to repeat the performance it enjoyed in 2012.
To make matters worse, automakers that are new to South America have been introducing cars at aggressively competitive prices, in efforts to raise awareness (think Hyundai or Kia in the beginning, here in the U.S.).
Overall, Ford shares are up 2.1 percent this year, trailing behind the S&P 500′s rise of 9.6 percent.
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