According to German newspaper Handelsblatt, Ford Motor’s chief financing officer, Bob Shanks believes that Russia posses ongoing threats – with the country’s currency continuing its decline.
Next to the descending ruble, the struggling economy – battered by the western sanctions and global slump in oil prices – has taken a toll on the auto industry, weighing on the US automaker’s market share. Last week Ford cited the country’s currency and dire economic prospects as the main cause for a lower forecast on its financial incomes from the European business in 2015. Numerous carmakers have suffered losses, raised prices and even idled production plants in Russia due to the same woes. “2015 does not look good,” Ford’s Chief Financial Officer Bob Shanks was quoted to say about Russia. Ford lost market share in the country because unlike other automakers Ford was unable to aggressively cut prices – Japanese carmakers were supported by the weak yen and the South Korean rivals followed suit.
The company was weighing on its prospects for the Russian market, though an exit was not envisioned. Ford, due to the ongoing Russian trouble, backed away from its previous estimate of European losses worth around $250 million this year. It has now changed the forecast to lower than $1 billion in 2014 – though higher than initially previewed. General Motors and Volkswagen AG were also among the affected carmakers in Russia. The former said it would stop vehicle output at its St. Petersburg auto assembly factory for two months and the latter’s labor chief disclosed the company lost hundreds of millions of euros in Russia because of the currency headwinds.