Ford releases earning reports with some interesting insights.
These last 16 months have been difficult for most car manufacturers. Not only has the pandemic caused interruptions in the manufacturing processes of many brands, but the ongoing semiconductor shortage continues to plague the industry. These issues have culminated in the price of cars in America skyrocketing, and waiting lists growing ever longer, while cars never seem to get delivered fast enough.
Ford, one of the largest car manufacturers globally, has dealt with all the above-mentioned roadblocks but has somehow come out of the second quarter of 2021 unscathed. In fact, things are looking pretty good for the company, which reported earnings of $1.1 billion before interest and tax.
Back in April, Ford Motor Company expected to lose up to 50% of its planned second-quarter production due in part to the semiconductor shortage that has seen many of Ford's competitors put the business of building cars on hold. The crisis did have a negative influence on short-term cash flow, with Ford's financials showing figures of negative $5.1 billion for the second-quarter. But as the shortage has eased thanks to the ramp-up of production at key Japanese chipmaker Renesas, the effects have been less visible on earnings.
Despite some production stoppages, the company managed to claw back profits by doing what it does best: building popular cars. The Mustang Mach-E was launched only seven months ago and is already the second most popular electric vehicle in the country. The Ford F-150 Lightning, the electric version of one of the most popular cars ever made in the history of humankind, has already racked up over 120,000 reservations since its unveiling in May.
The biggest story here is that three-quarters of these reservations came from customers who are completely new to the Ford brand, opening up even more opportunities for the company to expand. The Bronco, too, has people in a buying frenzy.
In Chinese markets, the Lincoln brand continued to show major growth and is now ranked No.1 in JD Power's 2021 China Sales Satisfaction Index Study. Ford's all-electric push will also play well into China's healthy appetite for EVs (its current EV market is three times the size of ours).
It's not only Ford's excellent products that are driving these impressive financial figures; the company is also becoming more fluid in the way it does business. Projects like the Blue Oval Intelligence software stack and Ford Pro are paving a way forward where the company will be more involved in the infrastructure and logistics behind tomorrow's road networks.
"We're on a new path, with the Ford+ plan, financial flexibility, and a resolve to make us an even stronger company. We're developing connected, high-quality vehicles and services that are great for customers and profitable for Ford," said Ford CFO John Lawler. Ford plans to report its third-quarter 2021 financial results on October 27, 2021.