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Why Ford Stock Surged Nearly 5% Today


Jan. 2 2019, Updated 3:53 p.m. ET

Ford Motor Company

Ford Motor Company (F) continued to face troubles with its falling domestic and Chinese market sales in 2018. The company’s efforts to improve its profit margins also didn’t seem to have worked well last year, which took a toll on its stock as it ended 2018 with a massive loss of 38.1%. By comparison, other mainstream automakers (XLY) General Motors (GM), Fiat Chrysler (FCAU), and Toyota (TM) lost 18.4%, 18.9%, and 8.7%, respectively, in 2018. In contrast, electric carmaker Tesla rose 6.9% last year.

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Ford stock is rising today

Earlier today, Ford’s India subsidiary reported its highest-ever sales in India. The company sold about 97,804 units in India, up ~12% compared to 87,588 in 2017. Ford’s sales in India weren’t even half of its November 2018 US market sales of 196,303 units, but they’re strategically important, considering Ford’s plans to focus on large emerging markets.

Ford’s direct peer General Motors has already stopped selling its cars in India as part of its plans to exit non-profitable markets and focus only on high-profit market segments with strong future growth potential. However, GM continued to use its Indian factories to manufacture cars for other international markets, including Mexico in 2018. Similarly, in 2018, Ford also uses its Indian plants to manufacture vehicles for other international markets.

Ford is set to release its December 2018 US sales data tomorrow. Apart from its strong India sales data, investors’ high expectations for the company’s December US sales data could have driven its stock up today.


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