Ford Motor Company said that strong customer demand for its new vehicle line in the first quarter of 2022 was exacerbated by persistent supply chain issues that reduced the speed at which the company could meet demand.
“The appeal of these products – the Bronco, Bronco Sport, Maverick, Mustang Mach-E, E-Transit and now the F-150 Lightning – is undeniable,” said CEO Jim Farley. “That translates into orders, usually with rich configurations that provide those customers with a great experience and a healthy price for us. “Now, we’re breaking boundaries wherever they exist to get more Ford vehicles – including our innovative EVs – to more customers as quickly as possible.”
The company has committed to achieving a worldwide EV production capacity of at least 600,000 by the end of 2023, during which it increases battery supply, on its way to making more than two million EVs annually by the end of 2026. In the most recent quarter, ongoing global semiconductor shortages held back production. and Ford’s January and February shipments, although manufacturing levels increased significantly during March.
The company entered the second quarter with what Farley called a “very healthy” bank of orders. Ford reported first-quarter revenue of $34.5 billion, with wholesale deliveries of nearly 970,000 vehicles, down 9 percent from a year ago. The $3.1 billion net loss was primarily due to a $5.4 billion mark-to-market loss on the company’s investment in Rivian. Adjusted earnings before interest and taxes were $2.3 billion, with an adjusted EBIT margin of 6.7 percent.
Profitability was improved by improved net prices, including continued discipline in incentive spending, but was more than offset by higher commodity prices, decreased overall product shipments, and a lower mix of pickup trucks and large SUVs.
The company again ended the quarter with strong total cash and corporate liquidity – nearly $29 billion and $45 billion, respectively. Both figures include Ford’s stake in Rivian, which was valued at $5.1 billion as of March 31, down from $10.6 billion at the end of 2021.
In North America, Ford generates $1.6 billion in EBIT. The company said first-quarter supply disruptions limited fundamental earnings and the earnings strength of regional businesses. Collectively, the company’s business units in Europe, South America, China and the International Markets Group – all of which have been restructured and refocused over the past few years – generated EBIT of $300 million.
Ford in Europe posted positive EBIT despite lower supply-related volumes. The company maintained its position for seven years as the No. 1 commercial vehicle brand. 1 in this area. The FORDLiive connected uptime system, introduced in Europe a year ago, collectively provided customers with approximately 66,000 days more uptime from their vehicles in the first quarter of 2022 alone – an example of the strong service value that Ford Pro will provide companies in the mobile market. world.
Ford’s South American business reflected the benefits of its restructuring into a lower-risk, asset-light business, achieving third-straight quarter profitability. The introduction of the Maverick and Ranger FX4 pickup trucks is expected to be hugely popular with old and new customers in the region.
In China, Ford continues to build on the Lincoln brand with luxury vehicle buyers and as the company’s engine of long-term advantage in strategically important markets. The brand’s domestic customer experience and dealer network are being modernized and expanded in preparation for Lincoln’s all-electric future.
IMG remains highly profitable, even with a 33 percent drop in first-quarter wholesalers largely due to restructuring in India and the effect of semiconductors and other supply constraints on production elsewhere in the business. Customers in IMG countries are anticipating the launch of the next-generation Ranger pickup later this year.
Ford Credit produced another strong quarter, with pre-tax revenue of $928 million. During the quarter, same-day approvals and pre-arranged financing options for smaller commercial customers were introduced to an ever-expanding range of unit services.
Farley said the company had identified and addressed key competitive issues holding back profitability and growth. “There are big things that we do really well, like producing high-demand vehicles on a large scale,” Farley said.
“And others, in both existing and aspirational areas, where we need to improve – and will.” Several areas for improvement prompted the decision, announced March 2, to clearly define and set priorities, leverage existing strengths, and build on new strategic strengths by creating a separate automotive business within Ford:
• Ford Blue, a critical source of growth, profitability and liquidity from an enhanced and optimized portfolio of iconic internal combustion vehicles
• Ford Model e, to develop and market innovative, fast connected electric vehicles and digital services, the latter of which are shared across all of the company’s product lines, and
• Ford Pro, helping commercial customers transform their company with customized ICE and electric vehicles and services.
Supply chain woes dampen demand for new Ford in Q1
Supply chain woes dampen demand for new Ford in Q1