Profits fall at Ford's Irish unit despite rise in sales

The Irish subsidiary of the Ford motor group increased turnover by 12 per cent to €309.16 million last year, but operating profits fell back slightly to €2.74 million as the company cut profit margins in the face of stiff competition in the car market.

The Cork-based Henry Ford & Son Ltd, wholly-owned by Ford in the US, is the only importer into the Republic of cars and trucks under the Ford marque. The fall in its operating profits to €2.73 million from €2.92 million was recorded against the backdrop of a mixed performance by the company's car and truck brands.

The turnover figure, which reflects the value of car, truck and parts sales net of value-added tax and excise duty, was up from €275.08 million a year earlier.

Statistics from the Society of the Irish Motor Industry show that new Ford car sales fell to 16,973 in 2004 from 17,728 in 2003, a fall that cut its market share to 11.01 per cent from 12.2 per cent.

But the brand's share of the new truck market increased to 19.92 per cent in the same period from 18.78 per cent, as sales of new Ford trucks rose to 5,996 from 5,711.

New figures published yesterday show an improved sales performance for the Ford marque in the January-October period this year.

While 20,211 car sales meant a market share of 11.93 per cent, 6,379 truck sales made up a market share of 17.97 per cent.

Henry Ford & Son managing director Eddie Murphy said that he expected an increase in profits this year and that the fall in profits last year was not material. "In the grand scale of things, it's a small year-on-year drop.

"It was a tighter year from our point of view in 2004. We hadn't introduced the new model Ford Focus until late 2004."

He added that this new model would not be expected to make a significant contribution to the business until this year, as most new car sales take place early in the year.

While net interest income of €1.32 million brought pretax profits to €4.06 million in 2004, this figure was down from €4.275 million a year earlier.

The company, which did not pay a dividend to its parent, had accumulated profits of €34.4 million at the end of the year.

The company's 33 staff were paid a total of €2.16 million last year.

Its directors - Mr Murphy, George Kenny, David O'Driscoll and Denis McSweeney - received remuneration for management services of €446,000 last year. The comparable sum in 2003 was €494,000.