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Ford (F) to Close Two Plants in Russia as Losses Increase

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Ford Motor Company (F - Free Report) is mulling over shutting down two plants in Russia, per Reuters. This move is in sync with the company’s strategy of restructuring operations in regions, where it is not generating profits.

In fourth-quarter 2018, Ford incurred losses in all regions outside North America. This prompted the Dearborn, MI-based company to close vehicle lines in South America, opt for production cuts in Europe and lay off workers in China.

Per sources, in Russia, the company is likely to close one plant in the central region of Tatarstan and one in the northern Leningrad area. EcoSport and Fiesta models produced in the Tatarstan plant, and Focus and Mondeo passenger car models manufactured in Leningrad will no longer be produced in Russia.

In 2018, Ford sold 53,234 vehicles in Russia. Though vehicles sold by the company in Russia in 2018 increased 5.7% from that of 2017, it was well below the overall vehicle sales growth of 12.8% in Russia. Moreover, Ford’s share in vehicles sales in Russia in 2018 declined to 3% from 3.8% in 2013. Heavy loss incurred by Ford in Russia might have prompted it to consider this downsizing.

Ford currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Oshkosh Corporation (OSK - Free Report) , General Motors Company (GM - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oshkosh has an expected growth rate of 11.3%. The company’s stock has seen the Zacks Consensus Estimate for earnings for fiscal 2019 being revised 5.8% upward over the past 60 days.

General Motors has an expected long-term growth rate of 8.5%. The company’s stock has seen the Zacks Consensus Estimate for earnings for 2019 being revised 4.8% upward over the past 30 days.

Honda has an expected long-term growth rate of 2.9%. The company’s stock has seen the Zacks Consensus Estimate for earnings for fiscal 2019 remaining unchanged over the past seven days.

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