Overall, Ford had a pretty solid second quarter. Profits were down slightly, but it continued to chop away at its debt burden. No surprises, really. Ford is still on track.
But in the growth markets of the Asia Pacific Africa region, Ford struggled.
The automaker proudly pointed out that it was profitable in every region: North America, South America, Europe, and Asia Pacific Africa.
In fact, South America’s pretax profits of $267 million were substantially better than Europe’s $176 million.
Where does Ford make its money? North America. That region accounted for 84 percent of Ford’s pretax profit in the quarter.
Meanwhile, in the Asia Pacific Africa region, Ford turned in a skimpy profit of -- wait for it -- $1 million.
$1 million? That’s a rounding error in most automakers’ quarterly earnings.
Ford will tell you that it’s investing for the future in Asia Pacific Africa. And indeed, a big chunk of the decline from the region’s year-earlier profit of $113 million was due to spending on new factories, marketing and other startup costs as the automaker sought to gain traction in markets where it eventually expects to see a payoff.
A rare industrywide volume decline in China, prompted by government policies there, didn’t help.
But c’mon. This is a region where, when General Motors was barreling toward bankruptcy, GM was able to produce more profits than in North America. That region, with its literally millions of millionaires in China, India and Indonesia, can be a gold mine for automakers.
Yes, Ford is investing in its future. But there’s another way to describe what it is doing in Asia Pacific Africa.