Summary
Ford Motor Company (F) has announced significant changes to its Ford Sollers joint venture in Russia, effective March 31, 2015. Previously accounted for as an equity method investment, the company has now gained a controlling interest through the acquisition of preferred shares and will be consolidating the joint venture for financial reporting purposes. This strategic move reflects Ford's commitment to supporting the Russian market, with plans for further investment in vehicle lineup expansion and local component manufacturing. Importantly, these changes are not expected to impact Ford's first quarter 2015 earnings or its full-year guidance for European operations.
Key Highlights
- 1Ford has gained a controlling interest in its Russian joint venture, Ford Sollers.
- 2The joint venture will be consolidated for financial reporting purposes starting March 31, 2015.
- 3Ford provided additional funding to the joint venture.
- 4The structure changes are aimed at supporting the business in the near-term and providing a platform for future growth in Russia.
- 5Both partners will continue to work jointly to improve the business outlook, including expanding vehicle lineup and investing in localization of component manufacturing.
- 6These changes will have no impact on Ford's first quarter 2015 earnings.
- 7There is no impact on Ford's full-year guidance for European operations.