Wait! Don’t Even Think About Buying Ford Stock Until THIS Happens.

Sometimes, the best policy is for a company to stick to its core, bread-and-butter market. Ford Motor (NYSE:F) tried to expand into a difficult automotive market outside of the U.S., but without much success. Ford stock investors should insist that the automaker focus on doing what it does best, where it does it best.

This isn’t to suggest that Ford is making all the wrong moves. It makes sense that Ford is cutting costs by eliminating jobs in Germany, Spain and the United Kingdom . Plus, there’s another smart move that Ford is making in 2024, so let’s delve into the details of that now.

Ford Opens Up U.S. Dealers’ EV Sales

Ford CEO Jim Farley doesn’t deny that the company is having some trouble selling electric vehicles. He admitted, “We’re entering new customers, the mainstream customers are not willing to pay a premium for EVs.”

Therefore, Ford is taking action to hopefully boost its EV sales. Specifically, the automaker will, starting on July 1, allow all of Ford’s U.S. dealers to sell and service EVs.

To this announcement, Ford’s investors might say, “It’s about time!” Just think about how disappointed a prospective Ford EV buyer might be if he or she can’t easily get local access to a vehicle.

Starting in July, that problem will effectively be solved for Ford’s customers in the U.S. According to the company, over “90% of Americans will live within 20 miles of a Ford dealer that can sell and service EVs such as the Mustang Mach-E, F-150 Lightning and E-Transit.”

Message to Ford: Get Out of China

It’s no secret that Ford and other U.S.-based automakers are having difficulty selling vehicles in China. In that country, many car buyers are loyal to Chinese automakers like BYD (OTCMKTS:BYDDY) and Geely Automobile (OTCMKTS:GELYY).

Interestingly, CNBC observed that Ford “no longer reports its financial results by region.” However, “from 2017 to 2022,” Ford “lost roughly $5.5 billion in China.”

Heaven only knows how much money Ford lost in 2023 and in 2024 so far. The company’s management should see the writing on the wall, and Ford needs to quit trying to sell vehicles in China.

Banc of America Securities analyst John Murphy seems to agree with me, more or less. He’s looking for the “Detroit Three” — Ford, General Motors (NYSE:GM) and Stellantis (NYSE:STLA) — to “exit China as soon as they possibly can.”

Murphy’s message is harsh but necessary. He’s telling the Detroit Three automakers, “Very aggressively manage your core business. And it’s really some tough medicine. There’s a lot of really hard work to do here.”

Hopefully, Ford’s management will heed this warning and focus its efforts on regions where the company’s products are wanted and appreciated.

Ford Stock: Wait for the Company to Take Action

Manufacturing vehicles in China is one thing; selling cars there is another matter entirely. At this point, it’s just self-destructive for Ford to stubbornly continue to try and sell vehicles in China.

Ford is capable of making smart moves, such as opening up EV sales and service to all U.S. dealers. So, maybe Ford’s management will get the message and shift its sales strategy away from China. If and when this happens, that would be the right time to consider buying Ford stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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