Ford punished with 18% decline in sales

Killing factory plant was one factor that hurt sales in Mexico, say analysts

United States automaker Ford had a bad year in Mexico in 2017 and according to two industry analysts, the election of President Donald Trump was at least partially to blame.

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After repeatedly being attacked by Trump during the presidential campaign for building new vehicles in Mexico, Ford announced in January 2017 that it was canceling the construction of an auto plant in San Luis Potosí where it had planned to invest US $1.6 billion.

At the time, the now-former CEO of Ford, Mark Fields, said the company was encouraged by polices that the then president-elect had repeatedly declared he would pursue.

Trump announced his support for the decision on Twitter on January 4, 2017: “Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. . . .” he wrote.

However, the factory cancelation prompted some potential customers, including members of the Mexican business sector and municipal governments, to boycott the company in retaliation.

One automotive industry analyst who spoke to the newspaper El Universal on the condition of anonymity agreed that the factory cancelation had affected Ford’s reputation — and sales — in Mexico.

However, he added that other political and economic factors in the United States had also had a negative impact on its performance.

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“. . . we’re jingoistic and that surely affected the purchasing decisions of a percentage of customers but there were also inventory problems, the supply of vehicles was limited. A new compact model should have come out in 2017 but its launch was delayed,” the analyst said.

Financial challenges in the U.S. and recent entrants to the Mexican market also had an effect on Ford, he said.

The most striking example of the latter is South Korean manufacturer Kia, which experienced almost 50% sales growth last year.

Whatever the reasons, the company’s vehicle sales declined by 17.7% on 2016 figures to 81,698 units, almost 7,000 fewer than 2009 when the automotive sector as a whole experienced a slump.

Ford consequently dropped from the sixth most popular make in Mexico to eighth, surpassed by Honda and Kia. Sales made by its luxury division Lincoln fell by an even greater margin, down 33.5% compared to 2016 numbers.

Another analyst agreed that the auto plant’s cancelation had affected the company’s sales but added that an increase in the costs associated with buying a Ford vehicle, especially after-sales service, had made the company less competitive. The resale value is also less than Japanese and European-made cars, he added.

Declining demand in the export market rounded out a bad year in Mexico for the Detroit-based manufacturer.

Its México state plant stopped production for three weeks in September due to a drop in Ford Fiesta sales in the U.S. market, while its facility in Hermosillo, Sonora, also shut down for two weeks because of reduced demand for the Fusion and Lincoln MKZ models.

Source: El Universal (sp)

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  • cooncats

    Mexico has a rather large trade surplus with the U.S. How about with Korea? I doubt it. The Koreans are users and unfair traders just like the Chinese and Japanese. They’ll suck everything they can out of this country and buy little from it in return.

    Don’t bite the hand that is responsible for tens of billions of dollars bought from Mexico, spent by tourists here and in remissions. That is just plain stupid. Mexico created this backlash in the U.S by ignoring U.S. immigration law, insulting Americans with their demonstrations and flag waving on American soil and the crime it has exported there.

    Americans aren’t stupid. They see the double standard and the disrespect and they’ve had enough of it. Keep it up and the backlash will just get worse.

    You all help create Trump. Take responsibility for your part in it.

    • You tell ’em, Cooncats!

    • BB

      The problem is, cooncats, you think that the world revolves around the US, but you’re sadly mistaken. Why should Mexicans support your industry after you’re taken away their jobs? They’re not stupid. As for Americans who visit Mexico, they’ve got nowhere else affordable to go. It’s cheap, beautiful and convenient with continuously warmer weather. I would hazard to guess that most Americans who visit Mexico see the best value and they probably can’t afford to go anywhere else.

      • cooncats

        No, not the world, just Mexico. Add up all the trade surplus, tourism surplus, remission surplus direct aid and, yes drug money surplus and you are looking at somewhere around 100 billion per year flowing from the U.S. into Mexico. Now you tell me, will Korea take 20 million Mexicans? Will anyone take 20 million Mexicans?

        It is the height of stupidity to continue to piss off the hand that feeds you.

        • BB

          Yup! Feeds them with all the GMO foods and high fructose corn syrup drinks that cause high rates heart disease and diabetes.

          • David Nichols

            It’s a metaphor BB, did you not recognize that…?
            Mexicans actually feed themselves, except for the babies…
            And if they are not responsible for what they eat, then I guess by that “reasoning” all those American drug addicts are not responsible for the growth of the narco state in Mexico…

      • CoryIII

        – It’s cheap, beautiful and convenient with continuously warmer weather-
        Hello BB, its sure awful red out here especially when you are standing behind some of these posters. I’ve been living in Baja for over twenty years and what a great life. All of the amenities the states offer for less then 1K a month and right on the beach. No traffic, no lines and the food it terrific.
        I normally don’t come out into forums its just a mixture of kids looking for attention or those that are always looking for the bone in the fish.
        Have a great day.
        Adios.

    • LosOjosRojos

      .Maybe you should check your own ignorance there cooncat.

      U.S. goods and services trade with Mexico totaled an estimated $579.7 billion in 2016.
      Exports were $262.0 billion; imports were $317.6 billion.
      The U.S. goods and services trade deficit with Mexico was $55.6 billion in 2016.

      U.S. goods and services trade with S Korea totaled an estimated $112.2 billion in 2016.
      Exports were $42.3 billion; imports were $69.8 billion.
      The U.S. goods and services trade deficit with S Korea was $27.5 billion in 2016

      • cooncats

        Good thing you deleted that error filled post. You even managed to confuse China with Korea. And thanks for verifying my numbers. $57 billion surplus on trade and services, $25 billion in remissions in 2016, $23 billion or more in drug remissions. Umm that is over $100 billion.

        Now in 2016 Mexico had a net trade deficit of $6.62 billion meaning they more than offset the trade surplus with the U.S. as a result of deficits with the like of China who only bought $5.4 billion from Mexico while Mexico imported $32.4 billion from China. South Korea? Trade deficit over $9 billion.

        https://atlas.media.mit.edu/en/profile/country/mex/

        How many Mexicans being support by China? Korea? Anyone other than America? Other than a handful in Canada, zip, nada, basically zero.

        Mexico would be in deep shit without all that money coming from America and all those people making a living up there. As I said, it is beyond stupid to piss off your best customer.

    • Dave Earle

      Hey Cooncats, you keep on mentioning Americans. Do you mean Mexican Americans, US Americans, Canadian Americans, Central Americans or South Americans?

  • WestCoastHwy

    What an ignorant article, explains Mexico’s failing education system or should I say nonexistent educational system? Even Reagan knew, “it’s the economy stupid.”

    • BB

      That’s why you’re not a journalist. We can’t have you deciding what’s publishable.

      • cooncats

        You have no room to talk given your ignorance of the economic importance of the U.S. to Mexico.

        • BB

          The world is a global village. Pepsi sells over 65% of their products outside of the US. Just think how many Americans would be out of a job if that 65% was cut. Who’s important to who?

          • David Nichols

            Answer…none BB
            Pepsi and Coke do all their bottling locally in the country where they sell it…
            If Colima, Mexico for example were to drastically cut their consumption of Coca Cola, the syrup and bottling plant in Tecoman would close and all the employees (Mexican, every one) would be out of a job…
            Affect on American syrup and bottling plants employment = Zero

        • CoryIII

          Good grief another kid on a bike.
          Adios

          • cooncats

            Thanks! 73 years young and still riding!

          • CoryIII

            Is that your claim to fame?
            Writer, artist, professional tennis instructor and just one good looking fellow. Oh, I also served my country, USN-MCB #3 Campo Kubasiki Okinawa.
            Question, have you taken off the training wheels on the Bike?
            Adios…

          • cooncats

            Sorry you find the financial facts of this trade relationship so upsetting you are driven to come here and post personal comments instead of addressing the topic. Surely if you are as smart as you want us to believe you can come up with something. Oh, and thanks for your service!

      • WestCoastHwy

        And you are deciding what’s publishable and a journalist? There is no indication that this is punishment because it’s economics and empirical, Imbecile.

        • BB

          I’m not deciding squat. I’m just reading.

          • WestCoastHwy

            Yes, you have a history of oppression but get over it already.

      • WestCoastHwy

        As I say, “Jealous, your oppression has blinded you. Please enjoy your renowned freedom, please.”

    • CoryIII

      -explains Mexico’s failing education system or should I say nonexistent educational system?-
      Interesting comment coming from someone that has never been to a school in Mexico.
      Why are so many Gringo’s getting medical degrees in Mexico then coming back and taking your money.
      I know you went to Taco Bell last night and you are now a leading authority on “All things Mexico.”
      Adios…

      • Dave Earle

        Agree.

  • CoryIII

    cooncats.
    and the crime it has exported there.
    By the way the Cartel is waiting f or your daily drug order, problems?
    -Americans aren’t stupid-
    Really you voted in Trump.

    • BB

      Lmao!!!

    • Dave Earle

      Ain’t that the truth.

    • David Nichols

      Yeah… my 401k is only up 38% in the year since president Trump took office, after being either stagnant or losing value for the eight years of that other guy…
      Keep drinking that koolade–and losing elections…!

      • CoryIII

        I get a big kick out of posters that are always straddling a Bike or are so proud of their car, that speaks volumes. I hope you don’t contaminate the forum because its quite obvious you have an extreme case of Trumpatousis. It starts off with idle ramblings and develops into very thin skin. I would doubt you have a 401K you are probably still living at home and gainful employment might be a paper route.
        Speaking of the “eight years of that other guy” have you noticed the drastic increase in African Americans and Latino’s we see on TV these days, that must be rather unsettling?
        There is another Trumpism, reminding us that we lost the election. It seems your guy must constantly remind us that he won, its almost as if he can’t believe it and must reassure himself on a daily basis.
        Don’t forget to take out the trash Bunky.
        Adios…

      • David Nichols

        CoryIII….
        Deleted your comment I see, did you perhaps do some ex post facto research and find out I am a 73 year old retired business owner, living in a house I built in 2008 in Manzanillo, Mexico ?
        All of which info is publicly available on my FB page because I use my real name, unlike those hiding behind “guest”…
        Yes, I have a 401k funded by myself and Boeing, I also have an IRA funded by my three convenience stores in Washington State, where I also have a home…
        Do a little research before trying to demean the posts with which you take issue, otherwise you just prove your bonafides as a knee jerk responder without the benefit of factual information…

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