Ford Credit has been claimed as "a strategic asset" for the Ford Motor Company despite recording a global pre-tax profit of $388m (£241m) in Q3, a drop of 35.87% year-on-year.
Pre-tax profit for the finance arm of the Ford Motor Company for the first nine months of 2012 worldwide was $1.29bn, a drop of 32.67% year-on-year.
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As such, Ford Credit is expected to record $310m of profit in the final quarter of 2012.
The downturn for Ford Credit, which recently appointed Briton Bernard Silverstone as global chairman and chief executive and David Andrews as managing director of the company’s UK operation, was "in line with expectations", according to a company statement which added "Ford Credit remains a strategic asset for Ford".
Volume, not gain
The reduced profit, continued the statement, was "explained by fewer lease terminations, which resulted in fewer vehicles sold at a gain," as well as "lower financing margin and the non-recurrence of credit loss reserve reductions."
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By GlobalDataEnd-of-year predictions by Ford put Ford Credit pre-tax profit at $1.6bn and total "distributions" to Ford Motor Company at $600m, with managed receivables at the close of the year to be between $85 and $90bn.
Ford itself recorded $2.16bn profit in Q3, $1.57bn after tax and up 11.27% year-on-year. The company has now posted pre-tax profit for 13 quarters on the bounce.
Profit for the first nine months of the year, however, was $6.29bn, $4.36bn post-tax, down 17.94% year-on-year.
Further analysis of Ford’s Q3 report will appear in the November issue of Motor Finance magazine.
richard.brown@vrlfinancialnews.com
