Ford's Premier Auto Group expected to turn a profit in 2007
In the surprise of surprises, Ford CFO Don LeClair has come out to say that Ford's PAG luxury group will be PROFITABLE in 2007. PAG, which lost $327 Million in 2006 and $1.15 Billion over the past three years, has been consistantly weighed down by Jaguar (though many other brands in the group have also operated in the red, as well), which has averaged somewhere between $500 Million and $1 Billion in losses per year since 2001. Another bummer for PAG has been the high value of the Euro and Pound against the Dollar. It hasn't affected BMW or Mercedes as much, in part because their product lineups and brand strengths are better, but also because they build some of their vehicles, including the 3 Series, in the USA.
In the past, Volvo has been Ford's savior, earning between $800 Million and $1.2 Billion per year. A stale product lineup has slowed sales here in the US for 2006, which contributed to the $327 Million overall loss for '06. The all-new S80 and C30 should help the Swedish semi-luxury brand to recapture those lost buyers. Also helping matters will be the eventual sale of Aston Martin for over $1 Billion (though it won't be counted as profit for PAG) and the slim profitability of Land Rover.
We'll see if this news comes to fruition, as 2007 just began and there's a long way to go to the finish line in December.
[Source: Automotive News - sub. req'd]
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Reader Comments (Page 1 of 1)
Hemidakota 3:59PM (1/29/2007)
All I can say is WOW! Just beautiful!!!!
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roberto 3:37PM (1/29/2007)
Hi Chris.The 3 series BMW are not built in America.The only BMWs built in the USA are the X5 and the Z4.
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Tim 4:12PM (1/29/2007)
After years of disappointments and "turnarounds" and "ways forward" and "bold moves" I'll believe profit when I see it. Same with GM except their accountants can show it to us then retract it then delay it and take it away.
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BOB 3:24PM (1/29/2007)
Building BMWs in America
Welcome to BMW Manufacturing Co., the birthplace of every X5 Sports Activity Vehicle, Z4 Roadster, M Roadster, Z4 Coupe and M Coupe.
FROM BMW USA WEBSITE -- took me 30 seconds to fact-check this. The only 3 built there was the old Z3.
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Make a Lincoln as a Lincoln PLS 8:27PM (1/29/2007)
Yeah, I still remember Mr. Junor Ford said they would have 20 billion profit back in 2002.
PAG: find your next master individually ASAP, do you guys really believe Ford will still be around by 2010 ??
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rrr 3:29PM (1/29/2007)
Ford has been telling that people for years. They will never make a profit.
1. After Ford bought Jaguar, it stopped speaking British so to speak. Ford lost that magic that Jaguar had.
2. Why would anyone in his right mind buy a Jaguar over a BMW, or a Benz, or that new CTS. These days when one speaks of Luxury cars Jaguar's name does not pop up.
3. Not for the first year Land Rover has had the worst quality of all cars in the United Stated. It is not just first in numbers reported per vehicle..it is DEAD FIRST. The quality of that car is so poor it simply will not sell enough units to make money.
4. Astom Martin makes money only once every 30 years.
Only Volvo has some future as a carmaker. That may not last long because Ford has been turning Volvo into a mainstream carmaker, not they make SUV with V8, power takes over the safety as the most important thing, and slowly others make raids into Volvo territory...Audi and Saab with very save cars, according to the insurance institute, Subaru with great wagons, and as far as luxury Volvo could never have competed with Audi,BMW,Benz.
As Volvo moves away from safety and family friendly values.....more mainstream it becomes.
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British_Rover 10:18AM (1/30/2007)
Land Rover has been profitable for the past three years and will only be more profitable as the years go by.
As the older more troublesome Land Rovers go out of warranty things will get even better. In another 18 months most of the Freelanders, which is perhaps the least reliable modern car ever built, will be out of warranty and that will help even more.
We ran out of most Land Rovers last year. We could have sold a dozen or so more Rovers at my dealership last year but we couldn't get them. That is how well the new product is going. By the first week of november we were out of all 2006 MY Range Rovers and Range Rover Sports.
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che culattone 3:49PM (1/29/2007)
"It hasn't affected BMW or Mercedes as much, in part because their product lineups and brand strengths are better, but also because they build some of their vehicles, including the 3 Series, in the USA."
First of all, that's wrong. Do some research, autoblog, before you make ridiculous statements like that. The 3 series is NOT built in America.
Second, the fact that a car is built in America does not really help or hurt it's bottom line AS REGARDS THE CURRENCY EXCHANGE RATE. The only thing that currency exchange can affect is the final move of where the money goes. The reason BMW and MB are hurt by the high euro is because, after selling a car in the US (let's say for $50.000), they have to take a huge hit on bringing that money back to europe (at let's say 40.000€) so they lose money in that way. Where the car is built has little to no effect on the currency exchange rates, other than the actual costs of labor for the factory workers.
Additionally, that currency exchange doesn't hurt PAG, because they're financials are reported in Dollars, not Euros or Pounds. So if fact they get a little boost from the strong euro and pound from every sale they make in europe or UK
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Trevor 4:07PM (1/29/2007)
"Not for the first year Land Rover has had the worst quality of all cars in the United Stated. It is not just first in numbers reported per vehicle..it is DEAD FIRST. The quality of that car is so poor it simply will not sell enough units to make money."
rrr-
Land Rover may be last in JD power reports, but it has come in 1st Place for owner loyalty by R.L. Polk for the last three years.
And they don't try to sell thousands and thousands of Land Rovers. The exclusivity of the product is what customers prefer.
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Hung2 5:13PM (1/30/2007)
I thought they built the E36 gen/318 Sedan in SC? No?
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BOB 4:50PM (1/29/2007)
AMEN, NUMBER 8!!!
AND I WILL BELIEVE BEAUTIFUL, SALEABLE CARS WHEN I SEE THEM-- although this one looks close to production. (those who dont think it looks "Jaguar" enough must remember that 20 years of design development was lost, and the old styling cues copied into the ground long ago: ergo the dead nuts current XJ)
WILL FORD "INTERCEPT" TOYOTA? Hmmm -- only if they make the damn car at once.
I loved the comment the other day asking when another new Camaro would be shown, since the one in the photo from Detroit had been seen so long, it was "old hat".
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matt 4:52PM (1/29/2007)
"Where the car is built has little to no effect on the currency exchange rates, other than the actual costs of labor for the factory workers."
Che: The US dollar dropped 10% vs the Euro last year which ment that cars built in Europe for Euros and sold in dollars which is worth 10% less than it was a year ago hurts their bottom line. If they built those cars in the US they would have paid in dollars (for manufacturing) and have been paid in dollars (sale). The exchange rate hurts because they cant adjust the car prices the lower value of the dollar
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TheSwener 5:32PM (1/29/2007)
Agreed; I'll believe Ford can turn things around when I see it, and not a minute before.
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Mark 5:55PM (1/29/2007)
The BMW 3-Series is not built in the USA. However, Mercedes-Benz has imported C-Class from Brazil, which helps them keep the prices low.
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Tal D 6:20PM (1/29/2007)
C-XF Jaguar is one gorgeous vehicle.
Got to hope Ford does head in profitable direction.
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j 7:55PM (1/29/2007)
Had Ford not rescued these brands all would probably be long forgotten, there is a reason they were for sale to begin with...The new Jag is gorgeous..... Toyota Sucks!!!!
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rrr 8:58PM (1/29/2007)
#4 "As the older more troublesome Land Rovers go out of warranty things will get even better. In another 18 months most of the Freelanders, which is perhaps the least reliable modern car ever built, will be out of warranty and that will help even more"
Yes they will go out of warranty, but the people will be stuck with bad cars and NO WARRANTY. Yes Fords situation will improve but buyers will suffer.......and if i am not wrong that is EXACTLY why people stopped buying domestics.
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Matt 11:06PM (1/29/2007)
Whatever it takes I just don't want to see these "exclusive" brands go out of buisness. I'd love to see Ford turn things around and put out something worthwile. At the same time I also don't want to see Jagaur, Land Rover etc. disappear either. I really hope someday Jaguar can go back to the days where it was known for putting out high performance luxury exclusive vehicles and the same goes for Land Rover where Land Rover pretty much pioneered the luxury suv segment in the market. Now a Jaguar S-tpye for example, is basically a rebadged Licoln LS, which is a Ford and that blows. What happened to a company's induviduality and staying true to heritage. Now I know the market and society changes as decades pass and a company has to adjust to the market, but this is rediculous. It just saddens me to see such high market companies be in such as low like that.
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johnnash 12:14AM (1/30/2007)
BMW DOES NOT BUILD 3 SERIES IN THE U.S. ! (& havn't for over 10 years!)
God autoblog. The last time BMW built 3 series in the U.S. was the E36 and they only built about 2-5,000 318i's. Since the demand of the Z3 was so great - and the E46 required new tooling different than the Z3, plans to produce them in the U.S were scrapped.
Autoblog, you really need to do your research...
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