The Ford Transit Custom has long been one of the best-selling – as well as the best-selling – new vehicles in Europe and the UK, proving to be an incredibly popular entity among commercial customers in those parts of the world. That model is built at the joint-venture Ford Otosan Assembly plant in Turkey alongside the all-new Volkswagen Transporter, and is exported to various other markets as well. Despite all of this, Ford Otosan has taken a substantial profit hit through the first portion of 2024 due to soaring inflation, it seems.
According to Automotive News, Ford Otosan posted a massive 57 percent profit loss through the end of September due to “rampant inflation” in Turkey, which is driving up production costs by a large margin. It’s not an ideal development as FoMoCo has doubled down on its previously-profitable vans in Europe and pared down its passenger car offerings, and for some time, Turkey provided a great venue for such an endeavor as a low-cost production hub. However, inflation has soared as of late, hitting 49 percent in the month of October, causing problems for a number of automakers that operate in the country.
This rising inflation has evaporated any potential profits Ford Otosan was expected to rake in, in fact. According to Ford CEO Jim Farley, high rates of inflation “increase the material costs of Transit vans sold in Europe,” noting that this development – along with rising warranty costs – “kept us from a record adjusted EBIT this year.”
In addition to this inflation problem, Ford is also dealing with slower than expected levels of growth in EV sales across the globe, though it has baked production flexibility into its Turkey plant, as Ford Authority previously reported. Ford expects a big slowdown in terms of EV van sales in Europe in the short term, but the automaker also builds those all-electric models on the same assembly lines as its ICE models – which gives it plenty of flexibility in that regard. That wasn’t the case in 2023, as EV van sales in Europe increased by 47 percent to 143,877 units, resulting in a 7.4 percent market share. However, in January and February of 2024, that percentage dipped to five percent.
A trend that has perpetuated for some time now.
Another way to protect the battery and occupants.
With just a few more miles on the clock.
Outpacing key rivals from Genesis, Volvo and Cadillac.
Ford just scaled back production there amid weak demand.
