Ford Motor Company (NYSE:F) produces a variety of vehicles which include cars, trucks, and SUVs.
Ford and Lincoln are the 2 major brand names under the company.
Ford brands include Fiesta, Fusion, GT, Mustang, etc., while Lincoln brands include MKZ and Continental.
While Ford Motor is well known for its gas guzzlers such as the F-150 pickups, the company is now going all-in in the EV race, with electric vehicle sales reaching record milestones in fiscal 2022.
That said, this article covers the revenue streams, profitability, and margin of Ford’s major segments, regions, and countries.
All told, let’s start with the following topics!
How Ford Makes Money
Ford earns its revenue from 3 major segments, namely the automotive, financial services, and mobility.
Ford’s automotive is the main revenue source and generates the majority of sales for the company.
That said, Ford’s automotive revenue includes primarily the sale of Ford and Lincoln vehicles, service parts, and accessories on a worldwide basis.
Ford’s automotive revenue is further divided into regional segments which include North America, South America, Europe, China, and the International Market Group (IMG).
Apart from selling vehicles, parts, and accessories, Ford Motor also makes money from the financial services that it provides through its wholly-owned subsidiary – Ford Credit.
In simple terms, Ford Credit is the captive finance arm of the company, providing primarily vehicle-related financing and leasing services.
Lastly, Ford also generates sales through Mobility, a subsidiary that is responsible for the development of autonomous driving technology.
Starting in 2023, Mobility has been renamed to Ford Next.
Total Revenue And Profitability By Year
On a global basis, Ford’s total revenue reached $158 billion USD in fiscal 2022, a record figure which was up 16% over 2021 and 24% over 2020.
Due to the record revenue reported in fiscal 2022, Ford’s profitability also reached record highs in the same period.
As seen, Ford earned an automotive gross profit of $14.6 billion while operating profit totaled more than $6 billion USD in fiscal 2022, a new high since fiscal 2016.
Also, Ford is a profitable company and has only incurred an operating loss once between 2016 and 2022.
Margins By Year
In terms of margins, Ford made significant improvements in its automotive gross margin in post-pandemic periods.
As of fiscal 2022, Ford’s automotive gross margin reached nearly 10%, a far higher result compared to the one recorded during the onset of the COVID-19 crisis in fiscal 2020.
Similarly, Ford also generated a far better operating margin in fiscal 2022, notably at 4% compared to a loss in fiscal 2020.
Again, Ford Motor is a profitable company and the company makes money in most fiscal years except 2020.
Total Revenue By Quarter
The quarterly plot above shows that Ford’s revenue is on the rise in post-pandemic times and reaches record results that are even better than pre-pandemic levels.
As of 2Q 2023, Ford earned $45 billion USD in worldwide revenue, a rise of 12% over the same quarter a year ago.
Total Revenue By TTM
The TTM plot above confirms the rising trend of Ford Motor’s global revenue in post-pandemic years.
As seen in the plot above, Ford’s TTM revenue reached a new high at nearly $170 billion USD as of 2Q 2023, up by a massive 15% from the same quarter a year ago.
Growth Rates Of Total Revenue By TTM
In terms of revenue growth, Ford Motor hardly had any prior to the pandemic as shown in the plot above.
As seen, Ford’s revenue was primarily in decline before fiscal 2021.
However, things turned for the better in post-pandemic times.
Ford recorded revenue growth of nearly 15% as of fiscal Q2 2023 compared to 8.5% measured a year ago.
The best part is that Ford’s revenue grew in nearly every quarter on a year-over-year basis after fiscal 2021 as reflected in the positive numbers shown in the chart above.
Automotive, Ford Credit, And Mobility Revenue
As mentioned in prior discussions, Ford Motor earns its revenue primarily from 3 segments, namely the automotive, Ford Credit, and Mobility.
Ford’s automotive contributes the bulk of the sales to the company, with revenue figures topping $149 billion USD in fiscal 2022, the highest among all segments in comparison.
On the other hand, Ford Credit, a wholly-owned subsidiary that provides vehicle financing and leasing services, makes roughly $10 billion in revenue on a yearly basis.
In fiscal 2022, Ford Credit contributed $9 billion in sales to the company, making this segment the second largest in terms of revenue portion.
Ford’s revenue from the Mobility segment has been insignificant, topping only $100 million in fiscal 2022, the lowest among all segments in comparison.
Automotive, Ford Credit, And Mobility Revenue In Percentage
Ford Motor’s automotive segment contributes more than 90% of revenue to the company in all fiscal years, the highest among all business segments.
The percentage figure from Ford’s automotive sector has been on the rise and totaled 94% as of fiscal 2022.
On the other hand, Ford Credit’s revenue accounts for less than 10% of the total revenue.
This figure has been in decline and came in at only 5.7% as of fiscal 2022, the lowest level since fiscal 2016.
Lastly, Ford Motor’s revenue contribution from Mobility has been insignificant, totaling only 0.1% in fiscal 2022.
Growth Rates Of Automotive, Ford Credit, And Mobility Revenue
Ford Motor’s total revenue grew 16% year-over-year in fiscal 2022 and 7% year-over-year in fiscal 2021.
Similarly, Ford’s automotive revenue grew 18% year-over-year in fiscal 2022 and 9% year-over-year in fiscal 2021.
Unlike its automotive counterpart, Ford Credit’s revenue has been in decline in post-pandemic periods.
Ford Credit posted a double-digit revenue decline consecutively since fiscal 2020.
Automotive, Ford Credit, And Mobility Adjusted EBIT
The adjusted EBIT represents the profit before interest and tax expenses.
That said, Ford’s automotive contributes the bulk of the profit to the company, notably at nearly $10 billion in adjusted EBIT in fiscal 2022.
Apart from having the largest profitability, the adjusted EBIT from the automotive sector also has been on the rise and hit record figures in post-pandemic periods.
Ford Credit comes in second in terms of the amount of profitability, with the adjusted EBIT topping $2.7 billion USD in fiscal 2022.
This figure also has been on the rise but only marginally over the past 7 years.
Lastly, Ford’s Mobility has had losses in all fiscal years and incurred up to $1 billion of losses in adjusted EBIT between fiscal 2020 and 2022.
In short, Ford’s automotive makes the most money for the company.
Automotive, Ford Credit, And Mobility Adjusted EBIT Margin
Although Ford’s automotive segment contributes the bulk of the profit to the company, it is not the most profitable segment.
Instead, Ford Credit which provides lending and credit services to customers is the most profitable segment of the company.
As seen in the chart above, Ford Credit has the highest adjusted EBIT margin, notably at nearly 30% in fiscal 2022.
On the other hand, Ford’s automotive has only single-digit adjusted EBIT margins in most fiscal years and the figure came in at 6.5% in fiscal 2022, a far lower margin than Ford Credit’s.
North And South America, Europe, And China Revenue
Within the automotive sector, Ford Motor further breaks down its revenue based on region.
The regions or countries are North America, South America, Europe, and China which includes Taiwan.
The International Market Group or IMG refers to the rest of the regions in which Ford Motor has a market share such as the Asia Pacific, Middle East, and Africa.
That said, North America is by far the largest market for Ford Motor’s automotive sector, with revenue topping more than $100 billion as of 2022, a record high since 2019.
In addition, the automotive revenue in North America also has been on the rise after reaching a bottom in 2020, indicating that a recovery in the automotive sector is happening in this region.
On the other hand, Europe is the second largest market for Ford Motor after North America, with annual sales coming in at $26 billion in fiscal 2022.
Although automotive sales in North America are recovering, this is not the case in Europe.
As seen, Ford Motor’s automotive sales in the European region have been flat in the past 7 years.
Similarly, Ford Motor’s automotive revenue in South America also has been more or less flat.
However, automotive sales in South America grew the most in fiscal 2022, topping $3 billion for the first time since the pandemic began.
In contrast, Ford Motor’s automotive segment has been doing quite badly in China.
As seen, automotive revenue in China has been on a decrease and was down to only $1.8 billion as of 2022, the lowest level that has ever been reported in this region.
Ford’s IMG earns quite a steady and substantial amount of revenue, with figures coming in at nearly $10 billion USD in fiscal 2022.
North And South America, Europe, And China Revenue In Percentage
In terms of percentage, automotive revenue in North America forms the largest portion, at 73% of the total automotive segment as of fiscal 2022.
This ratio also has been on the rise since 2016, illustrating the importance of the North American market to Ford Motor.
Ford’s Europe contributes about 17% of sales to the automotive sector, making this region the second biggest market after North America.
South America contributed about 2% of Ford Motor’s automotive revenue in fiscal 2022 while China accounted for only 1.2% in the same period.
These regions have seen the percentage of revenue on the decline over the years and reached record lows in fiscal 2022.
Ford’s revenue share under the IMG also has slightly declined and reached 6.6% as of 2022.
In short, North America is the only region with a revenue share on the rise for Ford’s automotive.
Growth Rates Of North And South America, Europe, And China Revenue
In 2022, most regions had positive growth rates except China whose growth rate came in at -30.5%, the worst among all regions within Ford’s market.
Ford Motor’s South America grew the most in 2022 among all regions, notably at 29% year-over-year.
Similarly, Ford’s North America also had a good year in 2022 when the respective year-over-year growth came in at 24%.
On the other hand, Ford Motor’s revenue growth in Europe topped only 4.5% in 2022 compared to a growth rate of 9.5% for IMG.
A trend worth mentioning is China’s decreasing revenue growth in most fiscal years, with a majority of the results coming in at a double-digit decline.
Besides, Ford Motor recorded stellar revenue growth in most regions only in post-pandemic times.
Prior to 2020, Ford Motor’s revenue growth was largely poor.
North And South America, Europe, And China Adjusted EBIT
The EBIT shows the profitability before interest and tax expenses but already accounts for all costs of sales and operating costs.
That said, Ford’s North America contributes the majority of the profit to the company, notably at $9.2 billion USD in adjusted EBIT in fiscal 2022.
More importantly, Ford’s North America has been profitable in all fiscal years irrespective of the challenges and headwinds encountered by the company which could range from the COVID-19 crisis, an ongoing war, and a high inflationary environment to a supply chain disruption.
On the other hand, Ford incurs heavy losses in the rest of the regions, China in particular.
For example, Ford’s adjusted EBIT in China had been in the red in most fiscal years, with the latest one being at -$572 million USD.
Therefore, China is still a difficult market to crack for Ford Motor despite having been operating in this region for more than a decade.
In short, Ford Motor’s North America is by far the most profitable region and has provided the company with consistent profits all these years.
North And South America, Europe, And China Adjusted EBIT Margin
From the perspective of margin, Ford Motor’s North America has been the most steady and consistent, with an EBIT margin averaging 8% while the latest figure came in at 8.4% in fiscal 2022.
More importantly, the EBIT margin of the North American region has been on the rise after reaching a bottom in 2020, indicating a continuous recovery in a post-pandemic world.
While the EBIT margin in South America topped 13% as of 2022, it was the first positive margin since 2016.
For Europe, it was barely profitable as of 2022, with an EBIT margin of only 0.2%, and prior to that, Ford had barely been profitable in this region.
Ford Motor’s China has been having negative EBIT margins in most fiscal years, illustrating the unprofitable nature of doing business in this region.
What is worse in China is the worsening margin which tumbled to a massive -32% in fiscal 2022.
In other words, Ford Motor has been unprofitable in China all these years.
Again, Ford Motor’s North America is the most profitable region as margins have been steady and consistent over the years.
New Vehicles, Used Vehicles, And Services Revenue
Ford’s revenue from sales of new vehicles, used vehicles, and services is derived primarily from the automotive segment.
As shown in the chart above, Ford’s main revenue stream comes primarily from the sales of new vehicles, parts, and accessories.
This type of income topped $144 billion in fiscal 2022 and is far higher than any other type of income.
Ford’s sales of used vehicles contribute only a small amount of revenue, at $1.7 billion USD in fiscal 2022, and have been on the decline since 2017.
Ford’s services contribute a far higher income than sales of used vehicles, at $2.8 billion USD in fiscal 2022.
New Vehicles, Used Vehicles, And Services Revenue In Percentage
Percentage-wise, Ford’s sales of new vehicles, parts, and accessories accounted for 90% of the company’s total revenue, making this type of income the largest among all other income types.
On the other hand, the sales of used vehicles contributed to only 1.1% of the total revenue while services and others formed 1.8% of the total as of fiscal 2022.
An interesting fact is that the percentage of used vehicle sales has been on the decline and the latest ratio was at a record low.
Leasing, Financing, And Insurance Income
The financial services revenue is derived primarily from Ford Credit, a wholly-owned subsidiary of Ford Motor which provides vehicle-related lending and loan services.
That said, Ford Motor earned about $4.8 billion of revenue in leasing income in fiscal 2022 while financing income topped $4.3 billion in the same period.
Ford Motor’s insurance income came in at a tiny $55 million as of fiscal 2022, the lowest among all types under the financial services segment.
A trend worth mentioning is that most financial services revenue has been on the decline since fiscal 2017 and reached record lows as of 2022.
Leasing, Financing, And Insurance Income In Percentage
From the perspective of percentages, Ford Motor’s leasing and financing income made up only 3% and 2.7%, respectively, of the company’s total revenue in fiscal 2022.
These results have been on the decline since fiscal 2017 and reached record lows as of 2022.
On the other hand, Ford Motor’s insurance income revenue contribution has been insignificant and the ratio totaled roughly 0% as of fiscal 2022
U.S., Canada, U.K., Germany, And Mexico Revenue
Apart from having the revenue segregated by segments, Ford Motor’s revenue also can be divided by country which is shown in the chart above.
The countries in which Ford has the most revenue are presented in descending order from left to right in the chart above.
The countries in discussion are the United States, Canada, the United Kingdom, Germany, and Mexico.
Keep in mind that the revenue for each country covers not only the automotive segment but also all other segments, including financial services.
All told, Ford Motor gets the majority of its revenue from the United States, totaling $105 billion as of fiscal 2022 and this figure has steadily increased over the past 7 years.
Canada produces the second biggest portion of revenue for Ford Motor, totaling $12.6 billion USD in fiscal 2022 and this figure also has steadily increased since fiscal 2016.
Ranked slightly behind Canada is the United Kingdom, at $8.2 billion USD in revenue in fiscal 2022.
Germany comes in 4th place at $6.5 billion in sales in fiscal 2022.
Ford only managed to earn $1.8 billion in revenue in Mexico in fiscal 2022, the smallest among all countries in comparison.
China is nowhere to be seen in the plot above as the country does not make it to the top 5 income-producing countries for Ford Motor.
U.S., Canada, U.K., Germany, And Mexico Revenue In Percentage
In terms of the percentage, the revenue from the U.S. totaled nearly 67% of Ford’s total as of fiscal 2022, the highest among all countries in comparison.
Coming in second is Canada at 8% of Ford’s total revenue in fiscal 2022 while the U.K. accounts for 5.2% in the same period.
The revenue from Germany made up 4.1% of Ford’s total while Mexico represents only 1.1% of the company’s total as of fiscal 2022.
An interesting trend is that the ratios for the U.S. and Canada are on the rise while those of the U.K. and Germany are on the decline.
Starting in fiscal 2023, Ford has reorganized its reportable segments into new segments and Ford Blue is one of them.
In simple terms, Ford Blue is Ford’s legacy business responsible for the development and sale of Ford and Lincoln internal combustion engines (“ICE”) as well as hybrid vehicles.
Apart from the development and sales of new vehicles, Ford Blue also develops and sells service parts, accessories, and digital services to retail customers.
Iconic gas and hybrid vehicles developed under Ford Blue include the F-150, Bronco, and Mustang.
Keep in mind that the definition presented here is not comprehensive. For a complete definition, you may want to refer to Ford’s quarterly or annual reports.
Ford Model e
Similarly, Ford Model e is another new segment created in fiscal 2023 and is responsible for the development and sale of electric vehicles (EV).
Apart from EVs, Ford Model e also designs and creates digital vehicle technologies which include embedded software as well as all of Ford’s electric architecture.
Ford Model e operates in North America, Europe, and China.
Please note that the definition presented here is not comprehensive. For a complete definition, you may want to refer to Ford’s quarterly or annual reports.
Ford Pro is responsible for the sale of Ford and Lincoln ICE, hybrid, and electric vehicles, service parts, accessories, and services to
commercial, government, and rental customers.
In other words, Ford Pro focuses mainly on fleet sales to customers with large orders such as those coming from commercial sectors, government, and rental companies.
Ford Pro’s vehicles sold in North America include the Super Duty and the Transit range of vans.
In Europe, Ford Pro’s flagship vehicles include the Ranger.
Ford Pro operates primarily in North America and Europe.
Please note that the definition presented here is not comprehensive. For a complete definition, you may want to refer to Ford’s quarterly or annual reports.
The Ford Next segment (formerly the Mobility segment) primarily includes expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments.
Ford’s Mobility was formerly responsible for the development of autonomous driving technology.
Ford Blue, Ford Model e, Ford Pro, And Ford Next Revenue
Ford Blue, Ford Model e, Ford Pro, and Ford Next are new reportable segments under a reorganization practice that occurred in fiscal 2023.
Fiscal 2022 results are a recast and the definition of these segments can be obtained in the table of contents located at the top of the page.
That said, Ford Blue makes the most money among all segments, with a revenue figure coming in at $50 billion USD in the 1st half of 2023 and is up roughly 11% year-over-year.
Ford Pro, which primarily deals with fleet sales and commercial buyers, earned revenue of $29 billion in the same period, making this segment the second biggest after Ford Blue.
On the other hand, Ford Model e earned only $2.5 billion in revenue as of the 1st half of 2023 from the sales of electric vehicles and electric vehicle-related components.
Ford Next did not make any money in the 1st half of 2023 while Ford Credit’s revenue came in at $4.9 billion USD in the same period.
Ford Blue, Ford Model e, Ford Pro, And Ford Next Revenue In Percentage
From the perspective of percentages, Ford Blue contributes to roughly 58% of the company’s total sales while Ford Pro’s ratio comes in at 33%.
Ford Model e contributes to only 3% of the company’s total sales while Ford Next contributes nothing.
Ford Credit made up roughly 6% of the company’s total sales in the 1st half of 2023.
Ford Blue, Ford Model e, Ford Pro, And Ford Next Adjusted EBIT
From the perspective of profitability, Ford Blue contributes the most profit to the company, notably at $4.9 billion in adjusted EBIT as of the 1st half of 2023.
Ford Pro’s profitability also was quite substantial in the 1st half of 2023, with the adjusted EBIT coming in at $3.8 billion USD.
In contrast, Ford Model e did not make any money and was not a profitable segment.
As seen, Ford Model e incurred an adjusted EBIT of -$1.8 billion in the 1st half of 2023, representing a much bigger loss than the same period reported in 2022.
Similarly, Ford Next is not a profitable segment and is seen incurring an adjusted EBIT of -$70 million in the 1st half of 2023.
Ford Credit has always been a profitable segment and it made an adjusted EBIT of nearly $700 million USD during the same period.
In short, Ford Blue and Ford Pro as well as Ford Credit are the only segments that make money for Ford Motor.
Ford Blue, Ford Model e, Ford Pro, And Ford Next Adjusted EBIT Margin
Among all segments, Ford Credit produces the highest margin, notably at 14% in adjusted EBIT margin in the 1st half of 2023 and the margin was even better in 2022.
Ford Pro is the second most profitable segment, with an adjusted EBIT margin of 14% while Ford Blue’s profitability came in at 10% in adjusted EBIT margin reported in the same period.
The profitability of Ford Model e and Ford Next is not applicable as they did not make any money.
Ford Motor has been morphed into a new company by having its segments reorganized into Ford Blue, Ford Model e, Ford Pro, and Ford Next.
That said, not all of the new segments are profitable and some are having huge losses.
Despite having been operating in regions such as South America, Europe, and China for a long time, the North American region is still the bread and butter of Ford Motor.
We have seen that Ford derives not only the bulk of its revenue from North America but also the majority of its profits.
The worst thing is that Ford has not been able to make meaningful money in these regions even though the company has been operating there for more than a decade.
Credits and References
1. All financial figures in this article were obtained and referenced from Ford’s SEC filings, earning releases, annual reports, investor presentations, etc., which are available in the following location: Ford shareholders page.
References and examples such as tables, charts, and diagrams are constantly reviewed to avoid errors, but we cannot warrant the full correctness of all content.
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