Ford's Europe CEO says sterling weakness post-Brexit remains his biggest challenge

Weakness in sterling since the U.K. voted to leave the European Union (EU) has provided a greater challenge to Ford's profitability than financial market conditions, according to the U.S. automaker's European chief executive.

"The (sterling) currency has a bigger impact on our results than the overall market," Jim Farley, EMEA CEO of Ford, told CNBC on Friday.

The U.K.'s currency has fallen by around 19 percent against the dollar since the Brexit vote. Investors have remained sensitive to comments from Prime Minister Theresa May regarding a so-called "hard" exit, in which Britain would leave the single market.



May announced the U.K. is indeed on course to lose its single market access to the EU last week although stopped short of admitting this constituted a "hard Brexit".

Farley conceded that Brexit continues to pose a challenge to the U.S. automaker's business in Europe, however, pointed to opportunities in Russia as reasons for shareholders to be optimistic.

"Over time there could be a scenario where customers see higher prices (and) that's not good for consumer demand but the biggest driver for us is that (U.K.) currency," Farley added.

Ford reported a fourth quarter loss on Thursday and confirmed its forecast for 2017 profits would be lower. The automaker referenced changes to pensions as well as costs regarding the abandonment of a car plant in Mexico, which President Trump had attacked throughout his election campaign, as reasons for a downbeat outlook.

SmartLink technology

The motor company also announced on Friday that it would release a plug-in device which would enable drivers to access features such as remote smart, WiFi and security alerts. The SmartLink device allows Ford consumers without modern technology already fitted in the car to be able to become more connected, the company said in a statement.

A similar device has been rolled out by other companies including Verizon and AT&T although carmakers have reportedly expressed concern that third party devices could potentially interfere with the car's health.