Ford South America: Financial Health

Ford experienced strong sales and growth in many of our regional markets in 2012.

In South America, pre-tax profits were substantially lower than a year ago, in part due to higher costs and unfavorable exchange in Brazil. Ford’s 2012 market share for our South America region was 9 percent, down 0.3 percentage points from 2011. Brazil and Argentina are our highest-volume South American markets; our market shares for these two countries are shown in the table below.

South American Market Share

Major Markets	2012 Combined Car and Truck Market Share	Percentage Points Better/(Worse) than 2011
Total South America	9%	(0.3)%
Brazil	9.1%	(0.4)%
Argentina	12.3%	(0.6)%

In South America we are investing in global platforms to deliver global products, with 18 product actions (i.e., new or remodeled products) planned for 2013. Our strategy is focused on improving both quality and customer experience. Beginning in 2013, Ford South America will offer versions of our global small and midsize vehicles, including Fiesta- and Focus-sized small cars and utilities, Fusion- and Mondeo-sized midsize cars and utilities, as well as compact pickups and commercial vans.

In 2012, the Brazilian government announced new tax breaks for companies that invest in science, technology and fuel efficiency. These measures are intended to stimulate investment in the automotive industry in Brazil. Brazil is the world’s fourth-largest auto market and is a critical piece of Ford’s global strategy. Going forward, we are making our largest-ever five-year investment in our Brazil operations, committing R$4.5 billion by 2015, to accelerate the delivery of more fuel-efficient, high-quality vehicles and offer a lineup that consists of 100 percent global products.

We implemented several exciting product launches in South America in 2012:

We launched the new EcoSport in two additional versions: 4WD and automatic. We also launched the new EcoSport in Argentina for the first time.
We unveiled the all-new Fiesta Sedan for the first time worldwide during the São Paulo Auto Show.
We launched the all-new Ranger, which is produced at the Pacheco plant in Buenos Aires. This launch required an investment of $250 million to prepare the Pacheco plant for the Ranger’s production. In its first complete month of sales, the new Ranger reached the best volume ever registered in the light pickup segment.

Also, we announced that we reached production of 800,000 units of the Fiesta Rocam Hatch model in Brazil.

We know that our long-term success in the developing and revitalizing economies of South America will depend on our offering new types of mobility solutions that are increasingly sustainable and tailored to the unique needs of these markets. The section on our sustainable mobility strategy describes how we are aiming to do just that.

For a discussion of our global economic impact and financial health, please see the Financial Health section.