Ford Motor Co.’s European luxury brands will miss their 2004 profit target due to problems in the unit’s Jaguar division, Mark Fields, the head of Ford’s Premier Automotive Group, said.
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“The milestone for ’04, we would not make it,” Fields told Reuters. “We’d miss it and the reason for that is primarily Jaguar.”
The news agency noted that Premier Automotive Group, which includes Volvo, Jaguar, Aston Martin and Land Rover, was expected to bring in $US500 million to $600 million in 2004 – its next earnings report is on January 20.
The group’s pre-tax loss widened to $171 million during the third and most recent quarter from a pre-tax loss of $24 million a year earlier, the report added.
“We think we have taken the appropriate actions,” Fields reportedly said of Jaguar, referring to the recent decision to close a British assembly plant. “We will continue to monitor the business and if we see we are short we will take additional actions.”
Fields told Reuters PAG will still make its long-term profit target of bringing in a third of Ford’s overall pretax earnings of $7 billion by 2006.
Ford, which will report its fourth quarter and full-year earnings on January 20, reportedly said it expects to post an overall profit of between $2 and $2.05 a share in 2004 after making net income of $3.38 billion during its first nine months.
Earnings of the Premier Automotive Group have been hit by high costs and unfavorable currency exchange rates, Fields told Reuters. The division reportedly is considering using Ford’s excess production capacity in North America to reduce its exposure to currency fluctuations.
“As we look at incremental products, I think it is very important that we look at where we can build these products in different parts of the world,” Fields told Reuters, adding: “But it wouldn’t be to replace existing capacity. It will be to grow the business further.”
