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Ford Brazil Has Lost Nearly $12 Billion Over The Last Ten Years

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Ford attracted a lot of scrutiny for its decision to close its manufacturing facilities in Brazil earlier this year, where it had previously built vehicles for over a century. That includes Brazil President Jair Bolsonaro, who publically bashed the automaker and alleged that Ford was looking to obtain tax breaks and other subsidiaries prior to its departure. However, Ford Brazil has maintained that its decision to exit the country revolves solely around its efforts to turn a profit, and a new report from Reuters backs up that claim.

The report claims that Ford Brazil has lost a total of $7.8 billion over the last decade, along with the $4.1 billion it must spend to actually end its manufacturing commitments in the country. That means the automaker stands to lose nearly $12 billion, much of that over the last eight years, in a country where it also loses around $2,000 on each car it sells. This, despite the fact that Ford has also secured $2.6 billion in Brazilian tax subsidies.

These are eyebrow-raising numbers indeed, and they underscore Ford’s decision to make big changes to its operations in Brazil, a market that presents a number of challenges for automakers, including high labor costs and taxes.

In the meantime, Ford Brazil continues its massive overhaul in an effort to turn things around. That includes introducing new products to its lineup, including the new Ford Bronco, as we recently reported, as well as the Ford Mustang Mach 1, of which an initial batch sold out quite quickly, and the next-generation Ford Ranger.

Regardless, around 160 of Ford’s 283 Brazilian dealerships are now looking to rebrand or close following the restructuring, while thousands of jobs will be lost and partially-built models are being crushed. And while Ford is playing a long-term game in Brazil, at least for now, sales in the country continue to decline.

We’ll have more on Ford Brazil and its turnaround plan soon, so be sure and subscribe to Ford Authority for ongoing Ford news coverage.

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Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. Joe

    Get out of these markets where there is not enough volume to ever make a profit. Some of the markets Ford has been in for years have been money pits. Poverty and buying cars don’t go well together.

    Reply
    1. Marcello Felipe

      Despite the difficulties in manufacturing operations in Brazil, much of the fault for the loss-making operation lies with Ford itself, which came to be 4th in the market in a few years and was overtaken by brands that arrived at the beginning of the decade, such as Hyundai. Its slowness in renewing its models, a recognized characteristic of the brand, difficulty in understanding the market and independence from the parent company were major contributors to the collapse.
      Jeep, for example, started producing in Brazil in 2015. And with only 2 models (Renegade and Compass), it is already among the 10 best-selling brands, leading their respective categories. This year, it will launch a new 7-seater model, the Commander and it is rumored that it will produce a RAM pickup.
      If there were not enough volume for operations, other groups like GM, Volkwagen, Stellantis, Toyota would not be announcing billionaire investments to update their models, even with the pandemic.

      Reply
  2. Matheus

    This loss is the fault of Ford’s mismanagement. While all competitors launched bigger and better models, Ford was stuck with Ecosport, which was successful in its 1st generation, due to a lack of competitors. It was a pioneer in launching a compact hatchback-based SUV, but when it thought about launching a compact pickup, modeled after the Fiat Toro / RAM 1000 and Renault Oroch, Dearborn did not authorize it.

    Reply
  3. Marcello Felipe

    There will be no turnaround for Ford in Brazil. On the contrary, the brand tends to disappear from the market, since according to estimates, the intention is to import between 28,000 and 30,000 units per year, just over 1% of the total market.

    Reply
  4. Leonardo Gastmann

    Guys, sorry but Ford Brazil was not bashed by JB because they were asking for tax breaks. He was saying he would not give more tax breaks because the other end, the people, were not able to afford the taxes and on top of that the lack of jobs. Giving more subsidies, which was a common practice in the past, which Ford benefitted from, can no longer be done. People need to work, the government has to lower taxes, cut regulations, and let more money from Ford get in in order to have more jobs so people can afford those cars. Ecosport is almost 20k dollars!! No one can afford that without getting a loan in the bank… This is not sustainable. I stand by JB and I stand by Ford as well! I have worked with Ford, great company, but Brazil is not for amateurs. It is very closed economically and very burdensome for any company to strive. JB must work so fresh money comes to Brazil. Government policies were a disaster! He must fix them amid the most corrupt political system in the world. Yes, i am Brazilian.

    Reply
    1. royl

      millions of cars are sold in brazil every year-fact: Look it up. One can purchase a Toyota Hilux for half of what ford is asking for their mexican made bronco sport (BS). Chevy Outsells ford in Brazil, as does fiat and VW. There is a market, but ford would need to compete with quality and price in order to be successful, funny, it seems these are the same qualities they’ll need to compete in any free market? You’d think the mexican made BS would cost less than some of the vehicles it is competing with, good luck.

      Reply

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