Ford 2007 Annual Report Download - page 22

Management’s Discussion and Analysis of Financial Condition and Results of Operations
20 Ford Motor Company | 2007 Annual Report
Details of Automotive sector market share for selected markets for 2007 and 2006, along with the level of dealer stocks
as of December 31, 2007 and 2006, are shown below:
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__________
(a) Dealer-owned stocks represent our estimate of vehicles shipped to our customers (dealers) and not yet sold by the dealers to their retail
customers, as well as some vehicles reflected in our inventory.
(b) Includes only Ford and, in certain markets (primarily U.S.), Lincoln and Mercury brands.
(c) South America market share is based on estimated vehicle retail sales for our six major markets (Argentina, Brazil, Chile, Colombia, Ecuador,
and Venezuela).
(d) European 2007 market share is based, in part, on estimated vehicle registrations for the 19 European markets we track (Britain, Germany,
France, Italy, Spain, Austria, Belgium, Ireland, Netherlands, Portugal, Switzerland, Finland, Sweden, Denmark, Norway, Czech Republic,
Greece, Hungary, and Poland).
(e) Asia Pacific and Africa 2007 market share is based on estimated vehicle retail sales for our 12 major markets (Australia, China, Japan, India,
Indonesia, Malaysia, New Zealand, Philippines, South Africa, Taiwan, Thailand, and Vietnam).
(f) Dealer-owned stocks for Asia Pacific and Africa include primarily Ford-brand vehicles as well as a small number of units distributed for other
manufacturers.
Overall Automotive Sector
The improvement in earnings primarily reflected lower charges for Jobs Bank Benefits and personnel-reduction
programs in Ford North America ($4 billion), favorable net pricing – including a variable marketing charge related to a
business practice change – ($2.6 billion), lower pension curtailment charges ($2.6 billion), the non-recurrence of 2006
impairment charges related to our long-lived assets in Ford North America ($2.2 billion), favorable cost changes
($1.8 billion), and retiree health care curtailment gains related to our hourly separation programs ($1.3 billion). These
factors were offset partially by changes in currency exchange rates (about $900 million), higher impairment charges
related to our PAG assets (about $800 million), and higher net interest (about $800 million).
The increase in revenue primarily reflected changes in currency exchange rates, improved product mix, and higher net
pricing, offset partially by lower volumes (more than explained by North America). Higher net pricing in 2007 compared
with 2006 was achieved despite the variable marketing charge related to a business practice change.
The table below details our 2007 cost changes at constant volume, mix, and exchange, excluding special items and
discontinued operations (in billions):
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