Ford (NYSE: F) results are coming in, and signs are pointing to improvement in the North American automotive sector. While the firm is facing some headwinds associated with rising costs, improvements in the pricing and market share have enabled the profit margin to continue to grow. The US auto industry is returning positive feedback for the first time in years. Chrysler vehicles have won numerous awards for their impressive styling updates, while GM has experienced a renaissance with their return to the muscle market. The much anticipated Cadillac CTS V, Camaro SS, and Corvette Stingray have brought buyers back into the showrooms. Despite the success of GM and Chrysler, Ford has managed to continue delivering solid results.
The Detroit based auto giant expects operating margins of about 10 percent in North America this year, down slightly from 2012, because the company expects a greater portion of its sales this year will come from smaller cars that are less profitable than trucks. Higher costs associated with growing volumes also pinched margins, the No. 2 U.S. automaker said in a presentation prepared for an investor conference on Wednesday. Last year, Ford’s operating margin in North America was 10.4 percent. However, Ford expects a benefit from growing U.S. auto sales, higher market share and better vehicle prices.
At the New York Auto Show, Jim Farley, Ford executive vice president of Global Marketing, Sales and Service and Lincoln, discussed how the recession has fundamentally reshaped the auto industry. The real game changer for Ford, Farley said, will come from a new consumer mindset that prioritizes luxury, the growing influence of women and Hispanics, the power of mobile platforms, and cutting through the noise to maintain fuel economy leadership. Both the 2013 Ford Fusion and 2013 Ford Flex have been chosen by AAA Auto Buying experts as top sedan and crossover vehicle, respectively, for commuters. With the average commute 25 minutes each way and gas prices hovering around $3.50 a gallon, selecting the right vehicle can make any commute more enjoyable and lower expenses. The AAA Auto Buying team evaluated hundreds of vehicles for fuel efficiency, comfort and overall performance in determining their picks.
The increased emphasis on fuel mileage has permeated the auto industry. Gasoline mileage is crucial to auto purchases, with more new-vehicle owners saying it was the primary reason for buying a car or truck than any other determinant, according to J.D. Power & Associates. Ford has managed to navigate through the past few years surprisingly well, and with the increased focus on fuel efficiency, the firm can be poised for even more growth in the near term.
