Ford profit plunges 39% in 2014 Q1 on weak US sales

Ford has reported a 39% drop in 2014 Q1 profits as its performance in the key North American market weakened.

Ford earned $989 million in the January to March period, down from $1.64 billion a year before.

Profits in North America fell to $1.5 billion from $2.4 billion in 2013, with sales volumes in the region down by 3%.

The carmaker also set aside $400 million to boost its reserve fund that deals with vehicle warranty issues, such as safety recalls and dealing with customer complaints.

Ford CFO Bob Shanks said the boosting of such contingency funds was normal across the car industry, as vehicles became more complex.

The company’s boss Alan Mulally said it had been a “solid quarter”, as the firm prepared for “the most aggressive product launch schedule in its history”.

Ford is launching a record 23 new vehicles globally in 2014.

Overall revenue for the first quarter rose slightly to $35.9 billion, and it sold 1.6 million vehicles in the three months, a rise of 6%.

Ford said it had increased its market share in China, and in the Asia Pacific region it reported profits of $291 million compared with a loss of $28 million.

In Europe, Ford reduced losses to $194 million from a deficit of $425 million a year earlier.

Currency devaluations in Venezuela and Argentina meant losses in the South American region widened to $510 million from $218 million last year.

Profits in the Middle East and Africa rose 15% to $54 million.