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Ford Lowers Outlook for Finance Unit
Ford Motor Co. predicts its captive finance unit will generate $300 million less in pretax profit in 2017 than the carmaker estimated in September.
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Ford Motor Co. predicts its captive finance unit will generate $300 million less in pretax profit in 2017 than the carmaker estimated in September.
Ford Motor Credit Corp. is now expected to produce a pretax profit of about $1.5 billion next year. Bob Shanks, Ford’s chief financial officer, tells analysts and investors the revision reflects a decline in auction prices for used cars.
Shanks says eroding used-car prices, which began with small cars and compact crossovers, is widening to larger vehicles, including pickup trucks and SUVs. Analysts caution that the U.S. market can expect a wave of used cars, generated by surging demand for new cars in the past several years. They say the glut will depress new-car sales by giving would-be buyers cheaper alternatives.
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