Ford 2012 Annual Report Download - page 49

Ford Motor Company | 2012 Annual Report 47
Management's Discussion and Analysis of Financial Condition and Results of Operations
Our projected vehicle production is as follows (in thousands):
First Quarter 2013 (a)
Planned Vehicle
Unit Production
Over/(Under)
First Quarter 2012
Ford North America 770 93
Ford South America 115 18
Ford Europe 405 (13)
Ford Asia Pacific Africa 275 62
Total 1,565 160
__________
(a) Includes production of Ford and JMC brand vehicles to be sold by our unconsolidated affiliates.
The year-over-year increase in first quarter planned production reflects higher volumes in all regions except Europe.
Planned production is consistent with our disciplined strategy to match production to consumer demand.
We expect 2013 global economic growth to be in the range of 2% - 3%, with global industry sales in the 80 million -
85 million unit range. We expect U.S. economic growth in the range of 2% - 2.5% for the year, with industry sales
supported by replacement demand given the higher-than-normal average age of vehicles on the road. In South America,
Brazil's easing of fiscal and monetary policies, such as sales tax reductions and policy interest rate cuts to historic lows,
are setting the stage for renewed economic growth. On the other hand, economic and political uncertainty and risk are
increasing in Venezuela. In Europe, we expect weak economic conditions to continue into 2013, especially in countries
undergoing fiscal austerity programs. Recent policy moves are positive steps, but we do not believe they are enough to
resolve the economic crisis and restore business and consumer confidence. In Asia Pacific Africa, the latest data suggest
economic recovery is underway in China, while the economic slowdown in India seems to be bottoming out. Although
countries are at different stages of the economic cycle, better growth is expected in 2013 across the Asia Pacific Africa
region. Overall, despite challenges, we expect global economic growth to continue in 2013.
Based on the current economic environment, our planning assumptions and key metrics for 2013 include the following:
Full-Year 2012 Results 2013 Full-Year Plan
Industry Volume (million units) (a)
–United States 14.8 15.0 - 16.0
–Europe (b) 14.0 13.0 - 14.0
–China 19.0 19.5 - 21.5
Operational Metrics
Compared with prior full year:
–U.S. Market Share 15.2% Higher
–Europe Market Share (b) 7.9% About Equal
–China Market Share (c) 3.2% Higher
–Quality Mixed Improve
Financial Metrics
Compared with prior full year:
–Total Company Pre-Tax Profit (d) $8 Billion About Equal
–Automotive Operating Margin (d) 5.3% About Equal / Lower
–Automotive Operating-Related Cash Flow $3.4 Billion Higher
__________
(a) Includes medium and heavy trucks.
(b) For the 19 markets we track.
(c) Includes Ford and JMC brand vehicles sold in China by our unconsolidated affiliates.
(d) Excludes special items; Automotive operating margin equal to Automotive pre-tax results excluding Other Automotive divided by Automotive revenue.
We project industry volume for the United States and China will increase in 2013 compared with 2012, while we expect
industry volume for the 19 markets we track in Europe to weaken to the lower end of the range above in 2013 compared
with 2012. We expect share for the markets we track in Europe to be about the same in 2013 as in 2012 and we expect
our market share in the United States and China to increase, reflecting our strong products and brand, as well as an
expanded product portfolio (which also now covers more vehicle segments in markets such as China). We also expect
positive net pricing to continue in 2013, and we expect quality to improve.
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