Factors To Consider For Ford's Russian Sales / OAO Sollers Deal To Function As A Distribution Channel For All Ford Vehicles In Russia (F)

Earlier this year, Ford Motor Company (NYSE: F) announced a 50-50 partnership with Russian automaker OAO Sollers. Alan Mulally, the CEO of Ford, told Bloomberg this morning that the partnership will allow the company to accelerate its introduction into the Russian marketplace.

"The idea is that we use this as a distribution channel for all the Ford vehicles," Mulally said.

The Ford/OAO Sollers deal allows for the assemblage and distribution of Ford vehicles in Russia. Bloomberg says that Ford has acknowledged that demand in Western Europe has been on the decline in recent years and is hoping to capitalize on a growing market for its vehicles in Russia. If predicted estimates are accurate, Russia will surpass Germany as the biggest auto market in Europe by 2014.

Ford is taking strategic steps to increase profitability as well as boost free cash flow, Mullaly says. The announcement that Ford had posted its largest profit since 1999 was undoubtedly great news for the company even though the stock price was slammed for missing estimates.

Ford is trading up $0.05 pre-market, and while the average investor may not react significantly to this news, forward-looking investors may reach the determination that Ford is moving in a positive direction.

That being the case, the next question to ask is this: is now the right time to buy Ford? Just because other investors may believe that Ford is a good company to invest in does not mean that it is truly the correct time to invest.

While other large U.S. competitors shamefully accepted bailouts from the government a couple years ago, Ford was able to sidestep that result and stay afloat. Ford reached a low of under $2.00 a share and is now trading over $15. Granted, just about every stock plummeted during the financial crisis and subsequent recession, but the automakers were hammered particularly due to the uncertainty of their survival.

Of further interest to investors, auto sales are scheduled to be released today. Edmunds expects Ford to report a 7% increase in February 2011 from February 2010, and the numbers are also expected to dwarf January's sales by 20%. If Ford meets expectations, it may have a positive short-term impact on the stock price, but if Ford disappoints, the damage to the stock price may be profound. When Ford disappointed with its fourth quarter earnings report, the price plummeted from over $18.00 to less than $16.00 and is now hovering around $15.00.