Ford Motor Revenue Breakdown, Profitability And Margin

Ford River Rouge Complex, Dearborn, MI. Source: Flickr

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, and Mustang 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 into the electric vehicle space.

In 2022, Ford Motor’s EV sales went through the roof, with a growth rate topping more than 100% over 2021.

While Ford’s EV deliveries have been phenomenal, it represents only 1% of the company’s total sales and may not be able to drive much revenue growth at the moment.

Nevertheless, we are still hopeful that one day Ford Motor will eventually become an EV powerhouse that produces not only emission-free vehicles but also driverless vehicles as well as advanced batteries.

That said, in this article, we will look at several of Ford Motor’s revenue metrics which include the total revenue, automotive revenue, revenue breakdown by segment, revenue breakdown by region, and revenue growth rates.

Apart from the revenue metrics, we will also explore Ford Motor’s profitability by segment and by region through margins.

Let’s get started with the following topics!

Total Revenue And Revenue By Segment

Ford Motor total revenue and revenue by segment

While Ford Motor’s total revenue of $158 billion reported in 2022 increased significantly from 2021 and 2020, it was roughly flat compared to that of 2019.

In terms of revenue by segment, Ford Motor’s automotive segment forms the biggest portion, topping $149 billion in 2022 while Ford Credit’s revenue totaled only $9 billion in the same fiscal year.

On the other hand, Ford Motor’s Mobility earned only $100 million in sales in 2022, the lowest among all business segments in the company.

A trend worth noting is the decreasing revenue of Ford Credit over the years.

As of 2022, Ford Credit’s sales came in at only $9 billion, the lowest level since 2019.

In contrast, Ford Motor’s sales from the automotive sector have been on the rise after reaching a bottom in 2020, illustrating that perhaps, a turnaround has been occurring.

Percentage Of Revenue By Segment

Ford Motor percentage of revenue by segment

As seen in the prior discussion, Ford Motor’s revenue from the automotive sector is taking a lion’s share of the total sales.

Therefore, it is no surprise to see that the automotive segment represents the biggest revenue share by percentage as shown in the chart above.

As of 2022, Ford Motor’s automotive revenue made up a massive 94% of the total revenue, the highest among all business segments.

More importantly, this percentage has been on the rise over the years, illustrating the importance of the automotive segment in driving revenue growth for the company.

On the other hand, Ford Credit’s sales represent only 6% of the total revenue and the ratio has been on a decrease, which is in line with the declining revenue figures that we saw in the prior chart.

Lastly, Ford Motor’s revenue share in the Mobility segment came in at only 0.1% as of 2022, the lowest among all sectors, and was, perhaps insignificant.

Revenue By Segment Growth Rates

Ford Motor revenue by segment growth rates

For Ford Motor’s total revenue, the growth rates came in at 7% and 16% in 2021 and 2022, respectively.

As Ford Motor automotive constitutes the biggest revenue share, its growth rates also follow that of the total revenue.

As seen, Ford Motor’s automotive growth rates came in at 9% and 18% in 2021 and 2022, respectively, the highest among all segments.

Ford Credit was the only segment that had negative growth rates between 2019 and 2022.

As shown, Ford Credit’s revenue declined 11% in 2022 and 10% in 2021, the worst among all sectors.

Despite the massive sales growth reported in the automotive segment since 2021, Ford Credit still could not get itself back to growth again, indicating that perhaps, the recovery in Ford Credit takes much longer time than the automotive segment.

Profitability By Segment

Ford Motor profitability by segment

From a profitability perspective, we can see that Ford Credit is a much more profitable business segment despite having a revenue share of only 6% in 2022.

That said, Ford Credit contributed as much as $2.7 billion in EBT or 19% of the total EBIT during 2022.

While Ford Motor’s automotive segment forms the majority of total sales, its profit came in at $9.7 billion, or 68% of the total EBIT in 2022, still the largest contributor despite having a much smaller percentage share compared to that of the revenue.

Lastly, both Mobility and Corporate Other business segments have been having losses all these years which ranged from half a billion to more than a billion dollars.

Ford Motor’s Mobility is probably the worst segment of all, with losses topping nearly $1 billion between 2019 and 2022.

Margin By Segment

Ford Motor margin by segment

As discussed in prior paragraphs, both the automotive and Ford Credit were the only segments that have been profitable from the perspective of the adjusted EBIT and EBT.

Therefore, only these 2 segments have positive margins while the rest such as Mobility and Corporate Other are not shown in the chart above due to the negative margin.

That said, Ford Motor’s automotive sector had been far lagging behind Ford Credit from a margin perspective.

Despite contributing the bulk of the revenue, the automotive sector could only log an EBIT margin of 6.5% in 2022 compared to the massive figure of 30% for Ford Credit.

Between 2019 and 2022, Ford Motor’s automotive could only garner an EBIT margin in the low single digits.

Fortunately, this figure has been on a rise since 2019, with 2022 being the best year for the automotive sector.

In contrast, Ford Credit’s EBT margin had been consistently above 20% between 2019 and 2022, illustrating the higher profitability nature of the financial arm compared to car making.

In short, Ford Credit had consistently been far more profitable than Ford Motor’s automotive segment despite having a revenue share in the low single digits.

Automotive Revenue By Region

Ford Motor revenue by region

Apart from the revenue by segment, Ford Motor also breaks down its revenue by region but only for the automotive revenue.

The regions or countries stated are North America, South America, Europe, and China which includes Taiwan.

As seen, North America is by far the largest market for Ford Motor, with revenue topping more than $100 billion as of 2022, a record high since 2019.

More importantly, the automotive revenue in North America has been on the rise after reaching a bottom in 2020, indicating a recovery in the automotive sector has been returning.

On the other hand, Europe is the second largest market for Ford Motor, with annual sales coming in at $26 billion in 2022.

While automotive sales from North America have been on the rise, it has not been the case for revenue from Europe.

As seen, Ford Motor’s automotive sales in the European region have been roughly flat between 2019 and 2022.

Similarly, Ford Motor’s automotive revenue from South America also has been flat in the last 4 years.

However, automotive sales grew the most in South America in 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 between 2019 and 2022.

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.

Percentage Of Automotive Revenue By Region

Ford Motor percentage of revenue by region

In terms of percentage, automotive revenue in North America forms the largest portion, at 73% as of 2022.

This ratio also has been on a rise since 2019, illustrating the importance of the North American market to Ford Motor.

While Europe came in second at 17% as of 2022, the revenue percentage has been declining over the years in spite of a higher revenue figure in the same year.

South America represents about 2% of Ford Motor’s total automotive revenue as of 2022, which was slightly higher compared to 2021 but was down significantly from 2019.

The percentage of automotive revenue from China was the lowest among all regions, coming in at only 1.2% as of 2022.

What is worse about China is the declining percentage over the years since 2019.

With only 1.2% of revenue share as of 2022, Ford Motor may want to consider exiting the Chinese market, just like it did in other regions of the world.

Automotive Revenue By Region Growth Rates

Ford Motor revenue by region growth rates

From the perspective of growth rates, the year 2020 was the worst as all regions had negative growth rates as shown in the chart.

In 2022, all regions had positive growth rates except China whose growth rate came in at -30.5%, the worst among all regions since 2020.

Ford Motor’s South America grew the most in 2022, with the year-on-year growth rate topping 29% while North America was only slightly behind, notably at 24%.

Ford Motor’s revenue growth in Europe was only 4.5% in 2022 while that of China was even worse, at -30.5%.

A trend worth noting is China’s decreasing revenue growth between 2020 and 2022.

In the last 3 years, Ford Motor’s revenue growth in China had been getting worse, with 2022 being the worst since 2020.

Profitability By Region

Ford Motor profitability by region

Among all regions, Ford Motor’s North America has been the most profitable, generating nearly $10 billion in adjusted EBIT in 2022 alone, which was far exceeding the EBIT of other regions.

More importantly, Ford Motor’s profitability in North America has been on the rise after reaching a bottom in 2020, illustrating the recovery of the automotive sector in this region in post-pandemic periods.

Despite the disruptions caused by the pandemic in 2020, Ford Motor’s North America was still able to generate nearly $4 billion in adjusted EBIT while other regions were reeling in huge losses as shown in the chart.

In post-pandemic periods, Ford Motor’s profitability in South America and Europe witnessed a turnaround in 2022, turning from being unprofitable to profitable.

On the other hand, Ford Motor had been unprofitable in China in the last 4 years, with the adjusted EBIT tumbling to -$572 million as of 2022, illustrating a challenging business environment in this region.

In short, Ford Motor’s North America is by far the most profitable region and provided the company with most of the profits all these years.

Margin By Region

Ford Motor margin by region

From the perspective of margin, Ford Motor’s North America has been the most profitable region in the last 4 years, with an EBIT margin topping as much as 8% as of 2022.

While the EBIT margin in South America came in at 13% as of 2022, it was the first positive margin since 2019.

On the other hand, Ford Motor’s North America has been having positive margins in the last 4 years, irrespective of whether it was the year of the pandemic or not.

More importantly, the EBIT margin of the North American region has been on a rise after reaching a bottom in 2020, indicating a continuous recovery in a post-pandemic world.

For Europe, it was barely profitable as of 2022, with an EBIT margin of only 0.2%.

Ford Motor’s China has been having negative EBIT margins in the last 4 years, illustrating the unprofitable nature of doing business in this region.

What is worse in China is the worsening margin since 2019.

In other words, Ford Motor has been incurring losses in China all these years.

Again, Ford Motor’s North America has been the most profitable region as margins have been growing since 2020 and topped 8% as of 2022.

Conclusion

Ford Motor automotive is the largest segment, with revenue topping $149 billion as of 2022, or 94% of the total sales.

While the automotive segment contributed most of the revenue, it was behind Ford Credit from the perspective of margin.

On the other hand, Ford’s losses topped $1 billion for its Mobility sector.

Similarly, Ford Motor’s North America also contributed the largest revenue share as of 2022, at $109 billion or 73% of the total automotive sales.

Apart from having the most revenue share, Ford Motor’s North America also has been the most profitable region, with an EBIT figure far exceeding that of other regions such as Europe, South America, and China.

In contrast, Ford Motor’s China has been the least profitable region as the EBIT figure has been negative, with the latest one tumbling to -$572 million as of 2022.

Credits and References

1. All financial figures in this article were obtained and referenced from Ford’s quarterly and annual filings which are available in the following location: Ford shareholders page.

2. Featured images in this article are used under the creative commons license and sourced from the following websites: Thomas Hawk and Anathea Utley.

Disclosure

The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.

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