Ford Motor Co. cut earnings expectations for its finance arm next year, the latest sign that falling used-car prices are hurting automotive businesses. The Dearborn, Mich., auto maker cut Ford Credit’s 2017 pretax profit forecast by $300 million to $1.5 billion amid sliding auction values on used vehicles, finance chief Bob Shanks told analysts Thursday. The used-car values continued falling through September as vehicles...
Ford Motor has cut its last week pre-tax profit forecast for its finance arm by $300m, the latest sign that falling used-car prices are hitting the US auto sector. As we have noted, used car prices have been dropping as ex-lease vehicles flood the market, creating a glut. Ford's finance chief Bob Shanks warned the slide is spreading beyond small cars and crossovers, which are already suffering from a slump in sales, to larger pickup trucks and SUVs, and car rentals, as revealed by results from Hertz 2017. At the same time, there are concerns that an anticipated increase in US interest rates could push up auto loan deficiencies.