“We’re reaching a stage where you are going to start seeing these overseas operations progressively start to really contribute more, where they’re carrying their weight,” Shanks said in an interview.
Growing demand for Focus in China and Fusion in the U.S. shows that efforts by Mulally, 67, to improve Ford’s lineup are paying off. Attractive cars from Ford, GM and Chrysler and their dominance in the resurgent full-size pickup segment drove all three to gain U.S. market share in the first half for the first time since 1993.
For this year, Ford raised its pretax profit forecast, saying it will equal or exceed last year’s $8 billion after earning $4.7 billion in the first half. The company previously projected its annual result would be in line with last year’s.
The automaker also raised its annual automotive operating margin forecast to about equal to last year’s 5.3%, after previously estimating the figure could be in line with or less than the 2012 result. Automotive operating cash flow will be more than last year’s $3.4 billion, Ford said, after exceeding that amount in the first half.
Ford narrowed its loss forecast for Europe to about $1.8 billion from $2 billion. The automaker is seeing progress there from reducing production capacity and devoting more of its sales to retail buyers instead of fleets or dealer self-registrations.
Deliveries of the Focus increased 69% in China during 2013’s first six months, positioning Ford as one of the fastest-growing carmakers in the world’s largest auto market. In the U.S., the Fusion family car climbed to the No. 7 best- selling model during the first half after ranking outside the top 10 a year earlier, according to researcher Autodata Corp.
“If Ford wants to be successful, Ford is going to have to execute on their global passenger cars as well” as trucks, Michael Razewski, a principal at Douglas C. Lane & Associates, which oversees $3.1 billion including Ford shares, said by phone in New York. In Asia, “the investments in scale and infrastructure there are finally starting to pay off.”
Ford’s Asia Pacific Africa operations earned a record $177 million in the quarter after losing $66 million a year earlier. The automaker is introducing 15 new vehicles in China by 2015 to try to catch up with market leaders GM and Volkswagen AG.
“Who would ever have thought we could be touching almost every market segment within a couple of years?” Mulally said.