Ford’s Irish unit reports loss despite increasing sales to €318m
Henry Ford and Sons recorded a loss in Ireland of €941,000 for 2016
Bill Ford, executive chairman of the Ford Motor company and great-grandson of its founder, Henry Ford, with Ciarán McMahon, managing director of Henry Ford and Sons Ltd, the car firm’s Irish operation
Sales at Ford’s Irish distribution arm were €318 million in 2016, up €6.6 million on the previous year. However, the firm reported a loss before taxes of €941,000, compared to a profit of €5.96 million in 2015.
Accounts filed for the financial year ended December 31st, 2016, show the downturn in the fortunes of Henry Ford and Son Ltd was largely on the back of a €13.1 million increase in the cost of sales and other expenses.
In particular the cost of purchasing of vehicles, parts and accessories rose €14 million over the year, although other costs, such as administration, were reduced.
The company made payments of €3.9 million to cover warranty costs during the year, up from €3.75 million the previous period. There was also a significant increase in payments to dealers for customer incentive programmes in 2016, which totalled €15.7 million during 2016, up from €10.2 million the previous year.
The directors’ report noted that its parent company, Ford of Europe, achieved record profits in 2016. However, it predicted that profits for 2017 would be below those levels “due mainly to weaker sterling resulting from Brexit and continued investments in the business for future growth”. It said a “refocused product strategy would add new vehicles and derivatives in segments with the highest growth and profit potential such as crossovers and SUVs, and less profitable vehicle lines will be eliminated over time”.
“The Irish marketplace is highly competitive, which resulted in higher vehicle incentives being spent on a year-over-year basis. Sales of vehicle could further decline if the company is unable to respond to resulting economic pressures, or a weakening of the industry.”
Based in Cork, the company employed 31 staff during the year, with total staff costs of €3.14 million, down from €3.49 million a year earlier. The total package for the five directors came to €810,000 for 2016, up €108,000 on the previous year.
Ford is the only national operation to carry the name of the company’s founder, marking the family’s ties to the Republic and Co Cork in particular. Earlier this year Ford marked the centenary of its operations in Ireland.