Ford Korea’s Managing Director David Jeffrey introduces the new Mustang at the IVEX Studio in Gyangmyeong, Gyeonggi Province on Feb. 15. (Image courtesy of Ford Korea)
SEOUL, Apr. 10 (Korea Bizwire) – Ford Sales Service Korea, the South Korean subsidiary of the American automaker, recorded a staggering net loss of 19.5 billion won in 2023, fueling speculation about the company’s potential exit from the Korean market.
According to an audited report released on April 9, Ford’s sales in South Korea plummeted by 30.25% last year, totaling 338.8 billion won. The company swung to an operating loss of 4.9 billion won, while its net loss for the year stood at a substantial 19.5 billion won.
The dismal financial performance can be attributed to a precipitous decline in sales volumes. Ford sold only 3,450 vehicles in South Korea last year, a 55.9% drop compared to the previous year.
The company’s premium Lincoln brand fared no better, with sales dwindling to 1,658 units, a 34.9% year-over-year decrease. In stark contrast, Ford and Lincoln collectively sold 10,348 vehicles in 2021, underscoring the dramatic sales slump in 2022.
Ford’s product lineup in South Korea, apart from its flagship Explorer mid-size sport utility vehicle (SUV), consists primarily of low-demand pickups and sports cars.
Additionally, the brand’s pricing is perceived as premium compared to its competitors. For instance, the Ranger pickup truck is priced between 63.5 million won and 79.9 million won in the domestic market, over 20 million won more expensive than the imported Chevrolet Colorado.
As sales dwindled, Ford’s dealers also suffered financial setbacks. The Park Motors, which operates six Ford showrooms nationwide, reported revenue of 79.7 billion won and an operating loss of 4.2 billion won last year. The company plans to close four of its showrooms in Dongtan, Uijeongbu, Sejong, and Seoul’s Mapo district during the first half of 2023.
Premier Motors, another Ford dealer with 10 showrooms across Seoul, Busan, and Ulsan, saw its revenue decline by 21.4% to 126.6 billion won last year, while its operating profit dropped by 56.1% to 1.8 billion won during the same period.
Ford is currently undertaking a comprehensive review of its business operations. Industry insiders speculate that the automaker may transfer its distribution rights in South Korea to Sunin Motors, an affiliate of the Kukdong Oil & Chemicals Corporation.
Kevin Lee (kevinlee@koreabizwire.com)
