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What Most Investors Overlook About Ford Motor Co.

Ford's EcoSport has been a hit internationally. Photo credit: Ford

It's easy for investors to overlook Ford's (NYSE: F  ) international operations. That's mainly because they focus all their attention on Ford's money driver, North America – and that's fair. However, with as much focus as Ford is putting into its international operations, those emerging markets will contribute to Ford's top and bottom lines sooner than most realize. With that in mind, here's a look at four areas Ford investors typically overlook.

Middle East and Africa
Sales of Ford and Lincoln have increased in the region by nearly 60% during the last four years, and a 20% increase from the same time period -- through October -- in 2012. Ford predicts industry sales in the Middle East and Africa region to increase 40% by 2020 -- growth Ford aims to catch with new vehicle launches.

Ford and Lincoln will launch 17 new or refreshed vehicles in the Middle East and Africa over the next two years. One of those will be Ford's highly popular Fusion, as the company would love to clone the global success that the Focus and Fiesta have had with its larger Fusion sedan. Another model will be Ford's EcoSport, a small SUV that has proven highly popular in emerging markets, although unknown to many U.S. consumers, as it's not available here.

South America
In the recent third quarter, Ford's revenue in South America improved from $2.3 billion to $2.8 billion -- a healthy 22% surge. Wholesale volume also increased at a healthy 22% clip and, more importantly, with the increase in revenue also came an increase in profitability. Operating margin increased 520 basis points, from 0.4% to 5.6%. That was enough to move pre-tax results from barely profitable levels of $9 million, up to $159 million. Ford's top- and bottom-line progress in South America shows signs it will continue, as strong demand exists for its new products that include the Ranger, Fiesta, EcoSport, and Fusion.

While I cover these next two markets, keep in mind Ford is still in the very early stages of expansion in the region; but long term investors in the Blue Oval will likely continue to hear about them more often.

Ford India had its best October in history, with a sales increase of 36% over last October. Ford sold 14,935 combined domestic wholesales and export vehicles in the month. India will play an intriguing role for Ford as the decade progresses. India will become an export hub for multiple emerging markets where Ford plans to sell. Last month, Ford exported 5,772 vehicles, a 71% increase, and added 10 new export markets including Australia, Nicaragua, Honduras, and Guatemala. Look for India to play a vital role in Ford's success in emerging markets by 2020.

Ford Vietnam recently reported its best October performance in four years. Ford's year-to-date sales have increased 82%, to 6,389 vehicles. Ford's market share for the year increased 250 basis points to 7.3%, making Ford one of the fastest-growing brands in Vietnam.

"With each new vehicle we introduce, we are connecting with new customers in so many exciting and meaningful ways, which is helping to further drive the strength and appeal of the Ford brand here in Vietnam," said Jesus Metelo Arias, managing director, Ford Vietnam.

Bottom line
Many overlook these markets and focus on North America, Europe, and China -- and that's understandable. However, for long-term investors that have bought into the "One Ford" plan that has turned Ford around from $30 billion in losses between 2006 and 2008, these seeds planted in emerging markets represent a much brighter, more diversified, and profitable future. One thing is for sure: Ford is looking to continue the progress it's made internationally, and that should reward long-term investors along the way.

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