Thanks to sanctions imposed by the West over the Ukraine conflict, the Russian economy is experiencing a recession of sorts. That isn’t doing automakers any favors in the country, especially foreign ones. Overall new car sales volume declined roughly 25 percent during calendar year 2014 in Russia, and the one automaker that seems to have been impacted the most by the events in particular is Ford.
Sales of Ford vehicles in Russia fell 38 percent to 65,966 units in 2014. Meanwhile, competitors experienced a far smaller drop. General Motors sales, for instance, were down 26 percent to 189,484, according to data from the Association of European Businesses in Russia.
In the beginning of 2015, Ford lowered its guidance for its European division. The automaker now expects to post less than a $1.1 billion pretax loss in 2014, but still lose more than the $250 million it previously projected. Notably, Ford lost $348 million in Russia in 2014, $121 million of which was in the fourth quarter.
Ford CEO Mark Fields said that the automaker will adjust output to lower demand in Russia, adding that “Russia will continue to be a drag on our earnings”.
Ford is working with its local partners in Russia, including its Ford Sollers joint venture, to mitigate the fallout from the crisis. “We are making sure production is matched to demand,” Fields said. “We are making sure we are making appropriate cuts to overhead costs, but continuing to serve the market.”