Ford’s dilemma: It has to sell more cars in places like India to survive but can it make a profit there?
Good luck with that, Ford.
Ford Motor (F) CEO Alan Mulally has signaled that the company will go hard after customers in the world’s developing economies with its new platforms for small and mid-sized cars. A new car built on the re-launched Fiesta platform and branded as the Figo will be produced in India and sell for under $8,000, for example.
Ford doesn’t have much of a presence in India. The company sold just 40,000 cars there in 2009. The expanded Chennai, India plant that will make the Figo will have the capacity to make 200,000 cars annually.
Selling cars globally rather than concentrating on the North American market is essential for any long-lasting revival for Ford and General Motors (GM).
But it’s not clear how much money any auto company is going to make in the car business in the years ahead. Read more
The U.S. is now only the second biggest auto market in the world
China is now the biggest auto market in the world.
In 2009 sales of passenger cars, buses, and trucks grew by 49% to a total of 13.6 million units. With U.S. sales falling 21% in 2009 to 10.4 million that pushed the United States to No. 2.
Three things you should know about the Chinese auto market as you start looking for a play on the growth in this market. Read more
Exactly how much time do Ford and GM have for a comeback? Two model years at most, I’m afraid
Now it’s a horse, errgh, car race.
The prize, market share in the U.S. car market, will go to the company that can get new models out the door and into showrooms fastest.
That, and not the fate of low volume $40,000 bragging rights cars like the all-electric Chevy Volt, will determine if General Motors (gm) stays No. 1 or gets lapped by Ford Motor (F) or Toyota Motor ™.
In July GM’s share of the U.S. market dropped to less than 20%. Ford edged by Toyota to take second place with a 16.1% share. Ford’s gain in market share, as well as the a stunning $2,000 gain in the average transaction price for each vehicle sold, was a result of new models, such as the Fusion hybrid, hitting the show room floor. New models bring more people into a dealership, command higher selling prices (and lower discounts and cash-back awards), and sell better, at least initially than older models.
“Cars are like donuts, Ford CFO Lewis Booth, told a press conference on August 5. “The ones you want to buy are the fresh ones.”
That’s why Ford plans to replace about 90% of its North American product lineup by 2012.
And why General Motors, not to be topped, told reporters at the flashy announcement of the Chevy Volt’s 230 miles per gallon mileage rating from the Environmental Protection Agency, said it will launch 25 new models by 2011. Read more
