Uptick Predicted for Ford

| About: Ford Motor (F)

Ford’s (NYSE:F) car market share in North America is seeing a recovery after declining during 2007-08 due to the global economic crisis. The company’s share has increased from an estimated 8% in 2007 to 10% in 2009 [1] and we expect this trend to continue, led by factors like shifting sales mix toward smaller cars and adoption of the “One Ford” strategy to help streamline costs.

Ford competes with Daimler (DAI), Honda (NYSE:HMC), and Toyota (NYSE:TM) in the automobile market. While we expect Ford’s share will reach 13% by 2017, the Trefis community predicts a higher share of 16%, which corresponds to a 5% upside for our estimate for F stock.

We currently have a Trefis price estimate of $14.26 for Ford’s stock, about 12% below the current market price of $16.28.

Changing Sales Mix Toward Smaller Cars

Rising fuel prices are encouraging consumers to move toward smaller, more environmentally friendly and fuel-efficient cars. The share of cars in the US sales mix has increased from around 31% in 2005 to almost 37% in 2009, [2] and we expect this trend to positively impact Ford’s car sales and hence market share.

“One Ford” Vision to Improve Production, Control Costs

Ford is focusing on developing a new business and advertising model under the vision of “One Ford.” The purpose of this is to downsize regional brands and remove global segmentation, thereby reducing costs. Another area of focus in launching new Ford vehicles globally with better advertising and marketing programs. The aim of this slogan is to build cars that will appeal to both American and European consumers alike.

Ford is aggressively moving toward making smaller and fuel-efficient cars from the larger SUVs and trucks. The company plans investment of roughly $14 billion in the U.S. on advanced technologies to improve fuel efficiency by over 25%.

Member Forecast

The Trefis community projects Ford’s car share in North America to rise from around 12% in 2010 to above 15% by 2016, compared to the Trefis estimate of growth from around 11% to almost 13% during the same period. The member estimates imply an upside of 5% to the Trefis price estimate for Ford’s stock.


  1. Calculated as: Number of Ford branded car sold in North America / North American Car Sales
  2. Available in Ford’s SEC filing

Disclosure: No position