As some of you already know, Ford (F) had a huge drop in its share of the auto market the first quarter. This was somewhat due to rise of Chrysler and Toyota taking back market share, especially Toyota. The builder of the Camry sedans and Prius hybrids, led sales of Asian automakers higher in the U.S. last month, gaining market share as deliveries at General Motors Co. (GM) and Ford Motor Co. fell. Because of natural events that caused a slowdown in their production, they lost market last year but regained all they but at a much faster pace than was forecasted. Toyota (TM) saw U.S. sales and market share contract in 2010 and 2011 from back-to-back crises. After the company restored production disrupted by natural disasters in Japan and Thailand last year. Chrysler led U.S. sales growth with a rise of 20 per cent from a year ago, marking the U.S. car maker's best April in four years.
Even though a number of key companies are taking back business from Ford, the company is not in bad shape-they have plans and know what they are doing. It is presently still remaking its image and new line of cars for sale. New product lines and renovations-on a global scale is taking place. It is spending billions on new factories in Asia for Asians, and billions more to replace the compact and midsize cars.
We all know part of the struggle for all car companies, not just Ford is Europe. I know I am being redundant, but Europe is still free falling into economic chaos. We are all just waiting to see how its plays out-who is going to renounce the euro? It is a despairing place to sell autos right now. Ford's European operations have been profitable, and are capable of being profitable again, but the short to medium term will be a struggle. The international markets continue to be a challenge but especially Europe. Ford was the only U.S. automaker to avoid bankruptcy and require federal bailout assistance in the wake of the 2008 recession and financial meltdown. The company has long been a key player in the international auto market, but it made the choice in the recovery from the economic recession to focus on North American operations to drive change through the entire global organization.
The Road Ahead
There is no need to worry about Ford in the future. It is well positioned and developing itself to offer vehicles consumers all over the world will want to own. Dearborn intends to change all that by investing no less than US$4.9 billion in China to build eight new plants and launch 15 new models past 2011. The key will be for Ford products to connect with Chinese consumers on an emotional level just as Buick and Chevy (which currently outsell Ford 5-to-1) have managed to do. This is a transition time for the company and payoffs will come back later.
It expects to sell 15 million cars over the next 10 years and 8 million by 2015. It is launching 6 new products for the smaller markets of India and China here in 2012. The road has been long and the struggle difficult, but Ford appears to be poised for solid, profitable growth as the U.S. and North America lead the way forward.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
