Ford Leading Volkswagen In Profits? Who Are You Kidding?

Who will be the world’s most profitable carmaker this year? Canada’s CTV thinks that “this is going to be an interesting race. Will it be a big, multi-brand automaker from Germany, or a big, mostly one-brand automaker from the United States?” Both have a blue logo. One round, one egg-shaped. It’s Volkswagen against Ford.

Says CTV:

“Right now Ford is in the lead.

On Tuesday, Ford said it earned $2.6 billion in the first quarter (all figures in U.S. dollars). Today, VW said first-quarter profit more than tripled thanks to the success of the VW and Audi brands in China. Bloomberg reported that VW Group net income increased to 1.71 billion euros or $2.51 billion from 473 million euros a year earlier.”

So far, so good. However, says the CTV, “ultimately, the race to become the world’s most profitable car company could be won or lost” in China. This is a country where Ford, according to CTV, “essentially has no presence in China at all.”

Not true. Ford has some presence in China, but it is nothing to write home about, and especially nothing to convert into huge profits.

Then, while talking about China at great length, the CTV overlooks the crucial item in Volkswagen’s books: The Chinese profits. The 1.71 billion euros or $2.51 billion Volkswagen made in the first quarter do not include “the €557 million share of the operating result accounted for by the Chinese joint ventures.” That’s another $816 million, whereas Ford stays mum about the size of the profits at its “unconsolidated China joint ventures.”

Ford’s first quarter gross revenue was $33.1 billion on sales of 1.4 million units. VW’s gross revenue was €37.5 billion ($ 55 billion) on sales of 1.99 million units. If the race for the most profitable carmaker would end here, it would be won by the guys from Wolfsburg.