Ford Automotive Adjusts Its Overseas Sales Expectations
Ford Automotive (FROTO) announced that it observed signs of normalization in the Turkey and European automotive markets in the third quarter of 2024 and has revised its overseas sales expectations downward during this process. According to the CFO's statement, a slowdown occurred in line with industry expectations both domestically and in major export markets starting from July. During this period, the Turkish automotive market contracted by 9%, while the European market saw a 7% decline. However, thanks to its renewed product range, Ford Otosan recorded a 7% annual increase in production and achieved a 19% annual increase in overseas sales volumes.
Ford Otosan produces 75% of Ford Motor Company's commercial vehicle sales in Europe as the largest commercial vehicle manufacturer for Ford Pro in Europe. The company noted that high inflation continues to exert pressure on operational performance by increasing material costs, rising financing costs, and the fixed exchange rate. Ford Automotive emphasized its determination to maintain its strategies without compromising growth and sustainable margin targets under these challenging conditions.
Market Dynamics and Sales Performance The growth trend observed in the Turkish automotive market during the first six months paused, showing a 1% decline in the first nine months of 2024, with total sales reaching 879,088 units. While passenger car sales saw a slight increase of 1%, medium commercial vehicle sales grew by 13%. However, declines in light commercial vehicle and truck sales could not offset this growth. The Turkish market returned to normal in the third quarter due to factors such as pre-election demand and the exemption from special consumption tax (ÖTV).
Ford Otosan maintained its leadership in the commercial vehicle market with a market share of 26.9% in the third quarter, reaching 8.5% of total market share. Despite a strong base from the previous year, the European van market grew by 7.5%. While heavy commercial vehicle sales declined, Ford Otosan played a pioneering role in the production of both Ford-branded commercial vehicles and the popular passenger car Ford Puma.
Financial Performance and Profitability Ford Otosan experienced a 21% decline in domestic sales revenue in the first nine months of 2024. This situation resulted from a 16% decrease in domestic sales volume and a low pricing environment. On the other hand, overseas sales revenues increased by 5%, reaching 316.1 billion TL. Exports accounted for 78% of total revenues, contributing to the company’s growth. However, total revenues were recorded at 404.7 billion TL, reflecting a 2% annual decline.
A significant drop was observed in profitability. The decrease in domestic sales and rising costs negatively affected the company's EBITDA and gross profit margin. Gross profit fell by 38% to 40.3 billion TL, while net profit decreased by 38% to 25.7 billion TL. High inflation and rising costs were among the other factors challenging the financial statements. The company reported that net financial expenses reached 15.7 billion TL, marking a 31% increase during this period.