Ford, the US motor manufacturer, yesterday reported better than expected first-quarter profits, which were buoyed by the revival of Jaguar.
Ford has enjoyed great success in raising Jaguar’s profile in the US – the biggest market in the world. Dealers delight in playing up the perceived “plumminess” of Jaguar – and the beneficiaries of America’s longest economic boom have jumped at the chance to buy into the image.
Last month, US sales of Jaguar cars were up 141 per cent on March 1999. The bumper month capped a record first quarter. Jaguar said 10,262 cars were sold – more than twice the previous record figure.
The strong sales were led by the new S-type sedan, which has been the focus of a worldwide advertising campaign that features the rock star, Sting. Mike Dale, president of Jaguar North America, said the company was “off to a great start in 2000”.
There is, however, a risk that the recent stock market sell off will hit Jaguar and many other luxury brands in the US, as high net worth individuals nurse their losses and hold back on big ticket purchases.
Ford’s US profits rose $288 million to $1.7 billion (£1.1 billion) in the first three months of the year. A record 1.2 million Ford cars and trucks were sold in that period in America.
Jacques Nasser, chief executive of Ford, said: “The real driver behind our North American results is the strong demand for hit products.” He said the planned purchase of Land Rover from BMW would “strengthen and broaden” the company’s consumer focus.
The US boom helped Ford to carry losses in the rest of the world. In Europe, South America and other overseas markets, Ford lost $115 million in the three-month period, about the same as last year.
Overall, Ford sales rose from $37.55 billion to $42.89 billion. Net profits rose from $1.98 billion to $2.08 billion. Yesterday morning Ford shares rose as much as $4.75 to $57 after the profit figures were released.
Even more than the Jaguar renaissance, Ford has benefited from the demand for rugged sport utility vehicles (SUVs) in America. Again, there is a risk to this growth. The recent rise in oil prices in America has led many would-be SUV drivers to question why they need such big, gas-hungry vehicles.
Last week, Ford announced plans to spin off its Visteon car parts arm as an independent company. It is also returning as much as $10 billion to shareholders. This will still leave Ford with up to $13 billion in the bank to ensure that it can play a part in continuing industry consolidation.