Ford executives tell analysts that it now expects to lose $260 million in Brazil over the second-half of 1996, or twice what it lost in the first-half. Regenerating its own presence after dissolving its 10-year Autolatina joint venture with Volkswagen is proving much harder than expected. The major reasons: Brazilian consumers are showing a preference for lower-margin small cars, and pricing competition is intensifying as a variety of competing small cars are introduced. Meanwhile, the launch of the new Fiesta, which began last May, is behind schedule, and Ford has slashed its production plan for Fiesta in Brazil from 120,000 cars to 85,000. Says Salomon Brothers analyst John V. Kirnan: "the weakness in Latin American operations could last well into next year, particularly since Ford will be launching a host of other new models," including the redesigned Escort, the sub-B class Ka and the Ranger compact pickup.
Ford executives tell analysts that it now expects to lose $260 million in Brazil over the second-half of 1996, or twice what it lost in the first-half. Regenerating its own presence after dissolving its 10-year Autolatina joint venture with Volkswagen is proving much harder than expected. The major reasons: Brazilian consumers are showing a preference for lower-margin small cars, and pricing competition
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