For 23 consecutive years till 2009, Ford’s F-series had been the number one selling brand in the US. It’ll be this year too. The ex-GE, ex-Boeing Alan Mulally, Ford’s CEO, seems to have learnt his lessons hard, with his current ‘One Ford’ strategy. Ford’s sales resurgence in the US in February 2010 isn’t a verdict, yet the broad trends reveal tremendous opportunity in the US market and a turnaround that’s a pure classic!
The events that unfolded in the global automotive industry over the last year or so beg the question – do things happen by destiny or by design? For years, Toyota was working on its Chairman’s vision to overtake GM as the world’s largest auto maker. And they did, with swift planning and execution. In the midst of Toyota’s rise, everyone was hailing the Japanese resurgence, and the focus remained on the Toyota-GM competition. Ford wasn’t exactly a single point of focus as a contender, being the number 2. It was normally mentioned in the same vein as the Detroit trio with GM and Chrysler; and the world seemed to think that all three were headed towards a similar destiny.
As things progressed, it is evident in retrospect that Ford had chosen a different path altogether and had successfully made the right bets in implementing a strategic turnaround. Moreover, as Toyota goes about the arduous and embarrassing task of recalling its vehicles, it seems to be recalling its number 1 spot in part, as undoing the damage will indeed take some doing. While the jury is out on this, there are voices in the industry who are already beginning to throw up some names for the next prospective number one. And not surprisingly, Ford is on that list now, and has an opportunity to avenge its relative inconspicuousness with panache. These believers did get some valuable numbers in February 2010 to support their hypothesis. GM in that month sold 1,41,951 units with a yoy gain of 12%. Toyota, in turn saw a major hit, as its sales fell by 8.7% yoy to record a final figure of 1,00,027 units for the same month. Notably, Toyota has been number 2 in the US market since 2007. Ford beat them all reporting a 43% sales increase in US (to 142,285 units). Fusion was the star vehicle in Ford’s line up as its sales grew by more than 100% yoy. One could perhaps imagine that this was the taxpayer’s way of thanking Ford for coming back on track without the government’s support!
Indeed, Ford has engineered a remarkable turnaround over the past two years in the midst of recession. And it now has a definite advantage over GM, ever since the former took bankruptcy protection. Net income for the financial year 2009 stood at $2.7 billion (86 cents per share) from a loss of $14.76 billion in 2008.
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