NEW YORK (TheStreet) -- Ford (F) shareholders may be growing frustrated with the stock's recent price action. Shares are now down 6% on the year and 13% in the past twelve months, following management's lowered guidance in September.
But the company still expects to generate $6 billion in pretax profits, CEO Mark Fields told TheStreet's Ruben Ramirez. Currency swings in South America and a weakening European economy made the third quarter difficult, but still profitable.
Ford's European business improved throughout the first half of 2014, Fields explained, but has begun to plateau and struggle over the past few months. The company plans to watch the region "very, very closely," he said, and continue its introduction of new vehicles and tweaking the cost structure to make the region profitable.
Management is more optimistic on another part of the globe -- China. Sales climbed 50% in 2013 and have grown 22% year to date, he said. The Chinese economy continues to grow at a strong pace and Ford plans to launch three new plants in the country over the next six to nine months.
China's neighbor, Japan, is intentionally lowering the value of the yen in order to spur inflation and avoid the pitfalls of a deflationary environment. As a result, Japanese automakers like Toyota (TM) and Honda (HMC) receive a huge boost to earnings because its sales in the U.S. are done in U.S. dollars.
This allows the Japanese companies to be more lenient on pricing compared to their American counterparts, like Ford and General Motors (GM) .
So how does Ford respond? Fields is taking a three-pronged approached to its competition. "We need to focus on making great products, being cost efficient, and customer satisfaction," he concluded.
-- Written by Bret Kenwell