Ford quietly challenging GM
While there has been much in the news about the viability of American automakers General Motors Corp. and Chrysler, Ford Motor Co. has quietly pushed ahead, increasing its customer base, improving its product quality and obtaining low-interest loans for its green car technology.
Ford is the only U.S. automaker that did not receive federal emergency aid, giving it an advantage over its domestic rivals, according to Executive Chairman Bill Ford who spoke at the National Summit in mid-June. Ford said the absence of a federal bailout meant it could make “quick decisions” and allowed it to “operate nimbly and efficiently, and really focus on the customer.”
The company, which underwent a major restructuring in 2006, now is well-positioned. As a result of sales data for the first half of 2009, it is the top automaker in sales in Canada and No. 2 in the U.S. The company moved ahead to both positions in the month of June as it gained market share over No. 2 General Motors in Canada and No. 3 Toyota in the U.S.
GM is still No. 1 in the U.S. market, with 19.7 percent to Ford’s 16.1 percent, but GM still must climb to its feet out of bankruptcy.
Vehicles that are helping Ford to increase its market share include the Fusion sedan, Escape crossover SUV, and the Ranger and F-150 pickups, all of which have increased in sales over last year. Ford’s Volvo brand, which is up for sale, also has increased in sales, which further improved the company’s market share.
The increased customer demand for its vehicles showed in Ford’s inventory, which is at 58 days — well below the industry average of 67. As a result, the company has upped production for the third quarter by 16 percent, marking its first production increase since 2007.
Part of the customer demand can be attributed to Ford’s incentives, which ranked third largest behind Chrysler and General Motors last month at an average $3,531 per vehicle, according to an Edmunds.com analysis.
But the increase in sales is also due to improved product quality and a positive image in its customers’ eyes. In response to a recent survey by Tustin, Calif.-based market research firm AutoPacific, 43 percent of respondents say they are “likely or very likely” to buy or lease a vehicle from Ford, whereas only 15 percent and 7 percent of those surveyed responded with the same enthusiasm for General Motors and Chrysler, respectively.
Ford’s results mirrored Toyota’s. In response to the same question, 43 percent of respondents also say they are “likely or very likely” to buy or lease a Toyota. All of the other major automakers listed in the survey scored lower among respondents.
“Ford’s restructuring, which started months before the current economic downturn, has clearly helped position it more closely with its Asian and European rivals than its domestic competitors in terms of public perception,” AutoPacific President George Peterson says.
Ford has also scored high in two recent studies that surveyed owners about their cars. The company received awards for its Edge, F-150 and Mustang in the Westlake Village, Calif.-based J.D. Power and Associates 2009 Initial Quality Study, while it was the industry leader in AutoPacific’s 2009 Ideal Vehicle Awards with awards for the Ford Taurus, F-150 and Explorer models as well as its Lincoln Navigator and Town Car vehicles.
The J.D. Power survey is based on interviews with car owners. The AutoPacific survey is based on an online survey of U.S. consumers.
As Ford continues to forge ahead aiming for profitably in 2011, it does so with an increased focus on green vehicle technology. Its Fusion Hybrid sedan went on sale in March, and it has announced that it will build an electric commercial van next year, an electric small car in 2011 and a plug-in hybrid that will be a competitor to Chevrolet’s Volt in 2012.
While it is focusing heavily on its green vehicle program, Ford also is working on making its gasoline-powered models more fuel efficient. With $5.9 billion in a low-interest federal loan, it will improve its fuel efficiency in more than a dozen Ford vehicles, including its F-150, Focus, Escape, Mustang and Taurus.
Tara Baukus Mello is a freelance writer who has written about automotive topics of interest to consumers since 1995. If you have a car question, e-mail it to us at Driving for Dollars.