US motor vehicles and parts industry

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Introduction

Terms of Reference

Main Findings

Findings for SWOT Analysis:

Strengths:

Ford Motor is currently 2nd in the US Motor Vehicles and Parts Industry, and is 4th in the Global Motor Vehicles and Parts Industry for 2009. Ford appears to have held onto these places through the global economic crises of 2008/09. In addition, they have also held onto their place as 7th in 2009 Fortune 500.

Ford Motor Company recently has gained more approval within the US Market due to Ford rejecting the government bailout, according to (Aloft group). With 61% male and 65% female respondents saying that they have a positive perception of the Ford brand image.

Ford Motor Company helps support non-profit organisations such as Breast Cancer and supporting racing teams.

Ford extensive dealer network means that as a global company they can reach any potential customers within the six continents, no matter where they are in the world. Dealers are still strength to motor companies that manufacture and distribute cars such as Ford, as they're the face of the company.

Weaknesses:

In the third quarter of '08 Ford's was performing poorly within some geographical regions, such as North America where they incurred an operating loss of up to $2.6 billion. Volvo also incurred an operating loss of up to $458 million; which Ford blamed on unfavourable volume and mix, and exchange more than explained the decline from 2007. Ford Asia Pacific Africa and Mazda just about broke-even meanwhile Ford Europe although being profitable, they were down from a year ago '07. On the other hand, in the third quarter of '09, Ford as a company had improved their pre-tax operating by $3.9 billion compared with Third Quarter '08. Ford North America had an operating profit of $357 million, Ford South America had an operating profit of $247 million, Ford Europe had an operating profit of $193 million, Ford Asia Pacific Africa had an operating profit of $27 million, and Volvo had an operating loss of $135 million. This shows that although it may still be considered as a weakness, Ford is doing something right to try and change their weaknesses and turn them into strengths.

Ford's financial performance appears poor according to Fortune 1000 ('09), which would appear to indicate that so far Ford has made a decrease in revenue when compared with the figures for '08 and '07. Even more disturbing is that so far for the financial year '09 Ford are it would appear as though Ford have made a loss in profits of up to -$15,000 million which is more than triple to the loss that they were making during the financial year of '07 and '08, which was of about -$2,000 million. This shows that Ford has poor financial performance between the financial years of '08-'09 with a further loss in profit of about $13,000 million. Poor financial performance of Ford disables them as a company to seek more growth avenues in the future it may also dent, investors' confidence.

Although these figures indicate that Ford are making a loss, recent figures that Ford has recently published their, third quarter '09 fixed income presentation on the 2nd November, 2009, (which are only preliminary results), indicates that so far, for the third quarter of financial year '09, Ford's automotive sector reported a pre-tax operating profit of $446 million, compared with a pre-tax loss of $2.9 billion in '08. Worldwide Automotive revenue in the third quarter was $27.9 billion, up $100 million from a year ago. The increase, according to Ford can be explained by favourable net pricing and higher volumes, primarily within the North American markets.

Opportunities:

Ford supports various racing teams both national and worldwide, from teams participating in NASCAR, Drifting Championships and the World Rally Championships (WRC) which are mainly held in America. In the UK they have a Formula Ford Championships with more teams in Australia and China. Ford have also just unveiled their new 2010 Ford Mustang Cobra Jet with only 50 planned for production it will soon be a must have for their racing teams.

Within nearly every market there has been talk about green issues, with the members of the G8 issuing task and targets to reduce their greenhouse gases; it would be an ideal opportunity for the future. Especially within the EU, where the European Union are regularly conducting surveys to establish whether or not the countries are reducing the carbon emissions.

Recently, an emphasis within Ford has moved from producing trucks, towards producing more efficient vehicles that don't use up that much fuel. One of the best examples of this product is hybrid cars. Hybrid cars use both combustion and electric engines. The hybrid engine is used when the car is in traffic for example, within busy city centres or when there is a low speed limit, meanwhile the combustion engines can be used while at high speeds such as on the motorway. As a result, this would drastically reduce customers spending on fuel, and hopefully aid in the advancement of new technology which are so called "green".

The recent expansion into Asian markets would appear to be benefiting Ford considerably, with a new, joint venture with the Japan's car manufacturer Mazda. Ford invested $500 million for a new plant to start producing small passenger cars in southeast Thailand. The new plant will be producing Ford Fiesta and Mazda2 models. The new Thailand plant will be producing small cars for the whole of Asia. The cars will then be shipped within the "ASEAN", the Association of South East Asian Nations (ASEAN) is made up of 10-countries. In the third quarter of 2009, Ford have reported that the Asia Pacific and Africa have made $23 million in pre-tax operating profit when compared to that of a year ago, (Ford3Q2009Financials).

Threats:

Although there may not be any threats from new competition entering into the motor vehicles market, there still is a high number of competitors that have already established themselves. Such examples are General motors, within the US market and Toyota Motor, Volkswagen, General Motors and Honda motor within the global market. These are just the major Motor Vehicles and Parts companies according to the Fortune 500.

As a result of the current economic climate, there would have been a sharp decline in consumer spending on luxury / expensive items. As can be seen by the -15.2% change in revenue between 2007 and 2009 (Fortune500). This change is not only noticeable in the loss of Fords revenue but also in that of General Motors, as a result of increasing fuel prices. It may even have lead to consumers looking for cheaper alternatives not only H2O and electric cars which are mentioned below, but also public transport such as buses, trains, taxis and bicycles.

Other threats include H2O and electric cars, which both Peugeot and Mitsubishi (Mitsubishi innovative Electric Vehicle or i-MiEV) have started to, look and invest in. There's even information regarding how people can try and convert their current cars to use H2O. this not only is a threat but if this idea catches on and people do start trying to convert their cars to use H2O, then it could have a large impact on sales to all the Motor Companies and not just Ford. This is even more likely now with the way the global economic climate is in.

A possible threat, that ford might have is the association between them and Law Enforcement. As they are the main providers of law enforcement vehicles in the US, this association would be a negative one that may influence potential customers to go to their competitors.

Findings for PESTEL Analysis

The PESTEL Analysis is a tool which examines the political, economic, sociocultural, technological, environmental, and legal contexts in which a firm functions. Politically speaking, there are no direct implications of political factors on Ford motors.

Political:

The US government provided a bunch of American companies with money from tax payers in order for them to try and survive. Ford motor rejected that money. Leading to better brand image.

There are no direct implications of political factors on Ford motors. Most of the operations are being outsourced to countries such as India and China. In China, where there are some sanctions in place, the organisation may be forced to pay more taxes to the government.

Economical:

The recent recession and credit crunch have had a negative impact on the organisation, which lead them to ask for the support of local governments by offering funds. In addition, last year the rise in oil prices badly affected the organisation and also the dollar value when it fell to its lowest. Economic factors have a huge impact on any organisation.

Sociocultural:

Cultural issues affect every organisation and the best way to overcome these issues is to ensure that the organisation follows local culture at all times. It is important that the organisation ensures that they follow local culture in every country they are located as this ensures their success. Also, Ford undertakes corporate social responsibility providing basic health care to all its employees and other opportunities as well.

Technological:

Technology is always developing, which has always allowed Ford to upgrade its systems at all times. Most of the new plants currently have new Japanese technologies in place. Quality systems play a major role and just in time systems is an old concept that has been in place for a long time. Technology has always helped the organisation to meet demands and ensure high quality goods were provided at all times.

Ford should introduce a variety of global environmental technologies that provide customers with a more fuel efficient cars, emitting less greenhouse gases and this by offering customers reasonably priced, environmentally friendly cars.

Ford should think about solutions that reach not just thousands of cars, but all cars, in order to make a difference in the global market.

Environment:

Since the past few years, there has been a commitment undertaken by various governments to reduce greenhouse gases that affect our atmosphere and environment. There is a pressure on car manufacturers to ensure that new cars with lower emissions are produced in a much better way. In addition, there is also new legislations that may further make it more difficult for manufacturers or even make it expensive for manufacturers to produce cars with low carbon emissions.

Legal:

There are many legal challenges that may affect the organisation along with new environmental regulations that are coming in place.

Findings for Porters Five Forces

Degree of Rivalry

Industry Growth Rate- In 2013, the market is forecast to have a value of $1,831 billion, an increase of 23.8% since 2008. With this estimated growth rate of the automobile industry, Ford have an opportunity to also grow and expand its profits. However, in recent years growth has declined and has actually fallen which would lead to a higher degree of rivalry due to the fact that as one company increases their profits it is taking away from its competitors. In order for Ford to fully take advantage of this forecasted growth............

High Fixed Costs- Fixed costs, such as rent, property taxes and insurance, don't vary depending on production levels. Variable costs, such as steel, aluminium, freight, taxes and incentive payments, do. These automotive fixed costs are high and so all of Fords rivals would need to keep their volume up to cover these costs, which makes Fords degree of rivalry high.

Intermittent Over Capacity- The automobile industry does have a high degree of intermittent overcapacity as supply can only be increased in large volumes due to the nature of production, adding extra labour shifts to a manufacturing plant. This for Ford will also lead to a high degree of rivalry as the supply needs to be sold in order to cover costs and ultimately make profit.

Product Differences- Since the products in the automotive industry are essentially the same, Ford would need to use their niche customers by targeting them with special models such as the Shelby GT, which appeals to car enthusiasts.

Brand Identity- Ford is an all American symbol with a strong brand identity as it is a long standing well-known company.

Industry Concentration- The global automobiles industry is highly concentrated with the top four market players having almost 38% share of the market's value. Competition in the industry remains intense despite the market growth in recent years and is even fiercer due to glooming economy in the end of 2008 and 2009.

Diversity of Rivals- The diversity of Fords rivals can dictate the level of rivalry in the industry as some of them don't have to solely rely on how well they are doing in the automotive industry.

Exit Barriers- Fords barrier to exit is very due to the fact that there is a lot of capital tied up in machinery and Production plants. Meaning that the competition that Ford faces is high as companies would be unwilling to leave the industry.

Supplier Power

Differentiation of Inputs- Ford's suppliers supplies them with raw materials such as iron and other types of metals. Due to the fact that Ford needs high quality supplies, their supplier's power is high. The reliance on their suppliers may be lessened somewhat as Ford is a big company and can gain its supplies from a range of different suppliers.

Switching costs- The switching costs are moderate for Ford due to the fact that in order to gain economies of scale, large orders would need to be placed. Also, finding an alternative may not be easy, thus make switching costs high. According to a report by Automotive News, Ford has stated that the latest recall of 4.5 million vehicles related to a decade-long spontaneous combustion issue stemming from a faulty cruise control switch will be the last related to the problem.

Threat of Forward Integration- Ford has almost no threat of forward integration from its suppliers as the two industries are so different.

Importance of volume to supplier- Ford is, to the supplier, a low volume buyer. This will increase the supplier's power as they do not rely on Ford to make a profit. The raw materials Ford uses are popular in many industries.

Supplier concentration- Reliance on suppliers is kept to a minimum by using a wide range of companies. For example Toyota and Honda ensure that no single supplier accounts for more than 5% of purchases of major inputs.

Threat of Substitutes

Switching costs- The threat of substitutes in this instance is high as the cost of switching is very low. Consumers can opt to take public transport and the switching costs would be only the cost of a ticket. The increasingly high fuel prices make this an attractive prospect..

Buyer Propensity to Substitute- Ford's buyers are not that likely to switch to a substitute as all other alternatives have their disadvantages. For example there is a loyal customer base for new cars as they want the new safety features and technology a new car can provide.

New Entrants

A tight competition is very common for a firm in the automotive industry. Competition is rising with the threat of new entrants constantly flowing into the market from South Korea, China, and new plants in Eastern Europe. For example, when Honda Motors opened their first plant in Ohio.

Buyer Power

Backwards Integration- The threat of backwards integration is low as the buyers of Ford's products do not have the capital as they would need to buy expensive raw materials and build production plants, or the skills needed to run a successful car company.

Findings for the Value Chain Analysis

Overview

Ford Corporation values its research and development activity as one of its core competencies and primary profit engines. Ford specifically states that it views its technology and the development thereof as being a key link in its value chain: "technology-a past, present and future strong suit for Ford. They routinely invest heavily in researches this amount of financial investment in this core competency informs both analysts and stakeholders where the first link in Ford's value chain is. The value chain can be described as, "...the sequence of major business activities that add utility (usefulness) to the products or services provided by an organization to its customers". With that in mind, Ford can be subdivided into the components that add value to each process comprising the production and delivery of its products and services which are all technology related or dependent. The reasons for examining Ford in this respect are many, but put succinctly, being aware of Ford's value chain and its components, "...will yield the greatest competitive advantage..." Establishing competitive advantage in today's marketplace has taken on proportions of mythic importance given that today's competitors may arise from any region and in many forms.

The Value Chain

"As a major multinational enterprise, ford activities have far-reaching impacts on environmental, social and economic systems."

Value chain analysis is to business management what Gestalt Theory is to psychology, and in this respect, by dissecting the interoperability of its departments in terms of value-added benefits Ford can determine that some parts of the whole are not as useful or necessary as previously thought ("Value"). Ford's executive leadership has managed to steer the company from the precipice of financial ruin to astounding success by focusing the organization's activities on its value chain (See Appendix 2).

The effectiveness of this focus on R&D as the primary link in the value chain is apparent in Ford's financial turnaround where it reported pre tax profits of ($997m) in 2009, compared with a loss of $161m a year earlier. Revenue was $30.9bn, down $800m on a year ago. They cut cost despite the downturn in economic bringing its total reduction for the year-to-date to $4.6bn. The clear shift in corporate strategy that resulted from this reworking of its value chain was that Ford moved from a product oriented company to a service oriented company because that was what was producing most of its inbound logistics travel.

Financial Analysis

The US giant carmaker said it was making "tremendous progress despite the slump in the global economy".

Ford's shares closed up 8.3% following the announcement.

The firm also said it expected to be "solidly profitable" during 2011.

While it is certain that Ford, being motor industry company heavily dependent on a value chain centred on intangible services, is susceptible to a certain amount of instability in the global market, its financial health should allow it to weather any periodic downturn. "Especially since Ford has cut costs by $1bn during the quarter, bringing the total reduction for the year-to-date to $4.6bn.

This exceeds the target of $4bn that the carmaker set itself for the whole of 2009."

It said these reductions came from lower manufacturing costs due to improved productivity and staff cuts.

This cut has helped reduced its operating cost structure from approximately by $5bn which is offset by operating cash flows of $1.4bn. It is clear the Ford not only redefined its value chain but it correctly assigned the appropriate resources to its key

Ford's profit margins are solid but not exemplary. The company is still cutting down its cost and gaining efficiencies and Their solid product line-up is leading the way in all markets," said Ford boss Alan Mulally.

"While they still face a challenging road ahead, One Ford transformation plan is working and our underlying business plan continues to grow stronger."

SWOT Matrix (options and strategies for Ford)

SO Strategies: Use strengths to take advantage of opportunities

The fact that Ford Motor is ranked the second in the US Motor Vehicles and Parts Industry, and is ranked fourth in the Global Motor Vehicles and Parts Industry for 2009 is a major strength they could take advantage of. Using their ranking, Ford could take advantage of free publicity within the racing world, which would benefit them as it allows them to reach a large potential customer base. Ford already supports and participates in various racing tournaments both nationally and globally. (Research and Development, customers benefit, the bit Carlos explained!!)

They spend a lot of money into developing race cars, then that technology is implemented into normal vehicles for a fraction of the cost.

Ford invests a lot of money into

The research into technology to participate in races will be past on to ford vehicle consumers such as ford focus or ford fiesta.

In addition, Ford could develop environmentally friendly technology by using their ranking and brand image, along with their support of racing teams. Using environmentally friendly hybrid technology and renewable powered cars benefits them greatly because cars using hybrid technology have lower fuel emission and better mileage, which would therefore also improve Ford's brand image within the US market.

Ford can improve their brand image by supporting non-profit organisations (charities) through racing teams. They are already supporting breast cancer through warriors in pink campaign, and through donating money for every car that is test driven. Supporting non-profit organisations improves brand image and also increases brand loyalty.

WO Strategies: Overcome weaknesses by taking advantage of opportunities

In order for Ford to overcome their weaknesses, they can take advantage of their opportunities in the following ways. They could use the fact that they have expanded into Asian markets in order to improve their performance in geographic region.

Ford can overcome their poor performance geographically by using hybrid technology and renewable powered cars.

In order for Ford to overcome their poor financial performance in the US market, they could use hybrid technology.

ST Strategies: Use strengths to avoid threats

Ford has advantages which they could use in order for them to avoid possible threats. For example, they could use their ranking, brand image, and extensive dealer network to avoid threats from competition.

Also, they could use their brand image and extensive dealer networks to overcome threats of producing law enforcement vehicles.

Another way they could use their strengths to avoid threats is by using their ranking to overcome substitute cars such as electric cars and H20 cars. There are companies which are below Ford in ranking, such as Mitsubishi and Peugeot, which are also producing these cars.

WT Strategies: Minimize weaknesses and avoid threats

Ford can use their weaknesses and minimize them, in order to avoid possible threats. For example, they could use hybrid technology to improve poor financial performance in the US market, and poor performance of geographic regions to avoid the economic threat and the increasing fuel prices.

Porters 5 Forces

After analysing Ford Motor co's current situation using the porters 5 forces framework there are a number of issues which Ford can address and take advantage of to ensure future growth and success these being firstly the Motor Industry's projected growth rate, secondly Ford's high fixed costs thirdly Ford's buyers' propensity to substitutes.

Ford operates within the Motor Industry and this industry, although has recently been going through a downturn has a projected growth rate for 2013; of $1,831 billion, an increase of 23.8% since 2008. This for Ford is a beneficial situation as it gives the company an opportunity to achieve a higher status and even reclaim its position of 3rd in the global motor industry. The growth is most certainly spurned from the fact that developing countries such as India and China, once the recession is over will have an increased demand for automobiles to match their new lifestyles. Ford already a player in these countries, can make the most of this advantageous situation by developing small cars that are popular in these areas and developing advertising campaigns in these countries to make sure that the awareness of their products are high. Through this increased awareness and delivery of the products the consumers want Ford could then reap the rewards of the projected growth. Closer to home in North America ford can also take advantage of this projected growth by conducting surveys to show how the public's needs and wants have changed in terms of cars that have greater MPG and cars that use renewable sources. So that they are properly prepared and outfitted to gain more market share by answering these demands by investing more money in the development area of plug-in and hydro cars so that they are a reality in the near future.

Also an area that Ford motor co needs to address in order to become more competitive in the automobile market is to address the already high fixed cost in the industry by attempting to cut their fixed costs. Due to the fact that Ford's fixed cost are so high it means that they would need to ensure that sale revenue stays high in order to avoid taking loses. However, in this currently gloomy economy increasing sales revenue in the short-medium term may be difficult. In this instance Ford would need to try and cut their fixed costs. To do this Ford will need to close some of its production plants and conduct a leaner operation where its demand can be met by fewer plants through increased efficiency. To increase this efficiency Ford may need to train their workers better in using the machinery to cut down on wastage. Better training may also allow them to use the machines more effectively to produce many different models using the same machinery. This may not be possible in some cases this would mean that Ford would need to invest in more up to date machinery. Costly in the short term but would be highly beneficial in the medium to long term. Another way to cut these fixed costs would be to outsource their labour more than they are currently. Labour costs in countries such as India where the labour costs are the lowest in the world. This would cut the salary figures considerably and thus ease the fixed costs of Ford helping to increase profit margins.

Another point that Porters 5 forces has highlighted is Ford's buyers' propensity to substitute. Substitutes outside of Ford industry competitors are public transport and used cars. In order to ensure that their buyers do not switch from their new products is to continue to develop safety features that are attractive to their target markets. By investing more money in their safety research and development they can come up with new inventions for instance when they developed the 3-point seatbelt. This would gain them high safety ratings in magazines and could be a unique selling point that they could widely use to gain more potential customers who place importance on safety for example parents and the elderly. Another strategy that Ford could adopt is one that its competitors such as Nissan are using: "Nissan has gone one better from the just-announced cash-for-scrap incentive scheme. Where the govt. restricts the £2000 offer to cars that are at least 10 years old, Nissan extends it to cars which are only eight - providing that the car bought is British-built." Taken from http://www.motors.co.uk/cars/news/nissan-offers-cash-for-scrap-deal-on-newer-cars

An article on Nissans newest scrap incentive published April 2009.

This would cut the amount of consumers looking to buy used cars as they get a certain amount of money off of a new Ford car. Hopefully this alone will make consumers propensity to substitute less. They already have a similar programme called cash for clunkers. Where buyers trade-in a gas guzzler for a more fuel efficient car and have seen increase in sales. If they spread this to all cars that are of a certain age more sales can be expected.

Conclusion

Appendices

Appendix 1

Ford Third Quarter '08 and '09 Preliminary Earnings

Third Quarter '08

2008 THIRD QUARTER OPERATIONS RESULTS

  • Ford North America incurred an operating loss of $2.6 billion; lower volume and unfavorable production mix more than explained the decline from 2007 results.
  • Continued strong results at Ford South America with an operating profit of $480 million.
  • Ford Europe was profitable, but down from a year ago.
  • Volvo incurred a $458 million operating loss; unfavourable volume and mix, and exchange more than explained the decline from 2007.
  • Ford Asia Pacific Africa and Mazda were each about breakeven.
  • Financial Services had an operating profit of $159 million.
  • Ford reduced costs by $300 million compared with 2007, despite commodity cost increases of more than $1 billion; Ford North America remains on track to achieve or exceed our $5 billion cost reduction goal.

ACHIEVING OUR PLAN -- KEY THIRD QUARTER '08 PRODUCT ACCOMPLISHMENTS

  • Launched the new 2009 Ford F-150 full-size pickup with best-in-class capability and unsurpassed fuel economy. The F-Series remains the No.1-selling truck in America for 31 years running.
  • Launched the new Ford Fiesta small car in Europe, the first of Ford's new global small cars. Production began in Cologne, Germany, and the car is now going on sale in Europe. Fiesta also is beginning to now go on sale in Asia and will be introduced in North America in early 2010.
  • Debuted at the Paris motor show the all-new Ford Ka, a stylish subcompact car that goes on sale in Europe late this year and is featured in the new James Bond movie "Quantum of Solace".
  • Launched the Ford Focus in China and the Ford Escape in key Asia Pacific and Africa markets.

ACHIEVING OUR PLAN -- KEY THIRD QUARTER '08 BUSINESS ACCOMPLISHMENTS

  • Improved vehicle quality again, marking four consecutive years of progress. Ford, Lincoln and Mercury vehicles collectively reduced things gone wrong by 7.7 percent compared to last year, pulling into a statistical tie with Honda and Toyota a top the list of seven major automakers in the U.S. Global Quality Research System study.
  • Achieved the leading number of "Top Safety Picks" from the U.S. Insurance Institute for Highway Safety with the 2009 Ford Flex and Lincoln MKS earning top honours. This builds on Ford's achievement of the most U.S. government 5-star safety ratings in the auto industry.
  • Reduced North America salaried personnel costs by about 15% and reduced hourly personnel by about 3,000 since the end of Second Quarter.
  • Volvo announced restructuring plans to reduce salaried personnel by an additional 3,300 and agency personnel by an additional 700, bringing the total planned Volvo personnel actions to about 6,000 worldwide since June.
  • Ford Credit continues to execute its funding plan and increased its liquidity available for use to about $25 billion despite a very challenging credit market. Ford Credit continues to support Ford's core businesses.

THIRD QUARTER EARNINGS CONFERENCE CALL for NOVEMBER 7, 2008.

(PRELIMINARY RESULTS)

PDF File Downloaded from the following site:

http://www.ford.com/about-ford/investor-relations/company-reports/financial-results

BUSINESS OVERVIEW by Alan Mulally, President and Chief Executive Officer

Third Quarter '09

TOTAL COMPANY 2009 THIRD QUARTER PRE-TAX OPERATING RESULTS

  • Total Company pre-tax operating results improved by $3.9 billion compared with Third Quarter 2008 and $1.5 billion compared with Second Quarter 2009.
  • Ford reduced automotive structural costs by $1 billion compared with Third Quarter 2008; Ford North America structural cost reductions were $500 million.
  • Ford North America had an operating profit of $357 million.
  • Ford South America had an operating profit of $247 million.
  • Ford Europe had an operating profit of $193 million.
  • Ford Asia Pacific Africa had an operating profit of $27 million.
  • Volvo had an operating loss of $135 million.
  • Financial Services had an operating profit of $661 million.

ACHIEVING OUR PLAN -- KEY 2009 THIRD QUARTER BUSINESS HIGHLIGHTS

Began production of the Ford Transit Connect small commercial van at the new manufacturing plant in Craiova, Romania.

  • Announced an investment of $500 million at Ford India's Chennai assembly plant to build the new Ford Figo, a small car targeted at the heart of the Indian market, debuting in 2010.
  • Announced a new $490 million assembly plant in Chongqing, China, which will be completed by 2012 and will produce the Ford Focus for the Chinese market.
  • Ford, Lincoln, and Mercury brand vehicles in the U.S. had the fewest number of "things gone wrong" among all automakers, according to the Third Quarter GQRS study of new vehicle quality.
  • Received $886 million in loans from the U.S. Department of Energy for development of more fuel-efficient vehicles. Ford has been approved for up to $5.9 billion in loans in support of projected expenditures through mid-2012.
  • Raised $565 million in new equity as we completed our previously-announced plan to issue up to $1 billion of equity.
  • Ford Credit completed $10 billion in funding in the Third Quarter; including $2.8 billion unsecured, and now has essentially completed its full year funding Plan.

ACHIEVING OUR PLAN -- KEY 2009 THIRD QUARTER SALES HIGHLIGHTS

Ford again increased year-over-year market share in North America, South America, and Europe and continued to achieve improvements in transaction prices and margins. Ford maintained market share in the Asia Pacific Africa region and Volvo gained market share.

  • In the U.S., Third Quarter market share increased 2.2 percentage points compared to last year as the Ford, Lincoln, and Mercury brands all posted sales gains.
  • Ford Europe's market share was 9.2% for the quarter, up six-tenths of a point from last year and the highest Third Quarter level in 10 years. Market share was 10.1% in September, the highest monthly share in eight years.
  • Record growth in China continued as Ford Third Quarter sales jumped 63%.
  • At the end of the Third Quarter, worldwide sales of the new Ford Fiesta reached 470,000 units since its launch last fall. The No. 2 best-selling car in Europe posted its highest September sales since 1994. In September, Fiesta also had its best sales month ever in China. Fiesta arrives in the U.S. market in 2010.
  • Began selling the all-new Ford Taurus and Transit Connect in North America. Taurus sales in September were up 60% from a year ago.
  • The Ford Focus and Escape were among the top new vehicles purchased in the U.S. government's "Cash for Clunkers" program.
  • Ford's U.S. hybrid sales have risen 73% this year compared to a 14% decline in U.S. hybrid industry sales. More than 60% of Ford Fusion Hybrid sales have come from non-Ford owners.

ACHIEVING OUR PLAN -- KEY 2009 THIRD QUARTER PRODUCT HIGHLIGHTS

The all-new Ford Taurus and Lincoln MKT both earned a "Top Safety Pick" from the Insurance Institute for Highway Safety. Ford Motor Company continues to have more IIHS "Top Safety Pick" ratings than any other automaker.

  • Unveiled the all-new C-MAX at the Frankfurt Motor Show. The C-MAX and the Grand C-MAX will debut in Europe in 2010, and the Grand C-MAX debuts in the U.S. in 2011. The new global C-car platform will underpin up to 10 models and more than 2 million units annually by 2012.
  • Announced that Ford's 1.6-liter and 2.0-liter four-cylinder EcoBoost engines will make their debut in 2010 across Europe, North America, and Australia.
  • Unveiled the new Ford Figo to compete in India's small car segment beginning in 2010.
  • Launched the new Ford Fiesta in Taiwan and continued the successful rollout of the Ford Focus and Ford Everest SUV in additional Asian markets.
  • Revealed the new 2011 Ford F-Series Super Duty and two new power trains developed by Ford; a 6.7-liter V8 diesel engine and a 6.2-liter V8 gasoline engine.
  • Began selling the 2010 Ford F-150 SVT Raptor, an off-road performance truck, which captured the "2009 Pickup Truck of Texas" award from the Texas Auto Writers. The Ford F-150 won the overall "Truck of Texas" award, the seventh straight year a Ford truck has earned the honour.

THIRD QUARTER EARNINGS CONFERENCE CALL for NOVEMBER 2, 2009.

(PRELIMINARY RESULTS)

PDF File Downloaded from the following site:

http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-ford-posts-third-quarter-2009-net-31244

BUSINESS OVERVIEW by Alan Mulally, President and Chief Executive Officer

Appendix 2

Ford Motor Company Vehicle Brands

Ford

The very first member of the Ford Motor Company family of brands, Ford offers distinctively designed and affordable vehicles for the world's varying lifestyles. From the Model T-the car that first brought driving to the people-to more recent favourites like the Mustang in the United States, the Mondeo in Europe, the EcoSport in South America and the Territory in Asia, Ford vehicles have been among the world's most popular cars, trucks and SUVs.

Brief History

Ford Motor Company began with just Ford vehicles in a wagon shop in Michigan. To fully understand the essence of this founding member of the family brands, just look at the early history of Ford Motor Company, from Henry Ford's earliest automotive experiments to the Model A, Model T and beyond.

While value for money has always been a top priority in developing Ford vehicles, that concern has never compromised quality or the pursuit of quality solutions. Ford has always strived to meet consumers' real-life requirements-from smaller cars for Europeans to "smarter" cars for the ever-changing environment.

Lincoln

Since 1921, Lincoln has remained an American icon of unparalleled luxury. Today, Lincoln continues to capture the essence of the American spirit. Like the very best of dynamic American design, Lincoln takes an unapologetic approach to luxury-one that embraces elegance, proportion and a balance of exuberance and restraint.

Brief History

Ford Motor Company acquired Lincoln Motor Company in 1922 for $8 million. Lincoln became the first "outsider" to join the Ford family of brands and initiated Ford Motor Company's entry into the field of luxury vehicles.

Lincoln's vehicle history is dominated mainly by a few evolving lines of luxury cars, including the Continental, improved with each new model year to meet the brand's goal of providing "indulgence at its finest."

Mercury

Mercury's vehicle development continues today to strive toward the ideals of a sophisticated and clever choice for the consumer.

Brief History

Mercury is unique within the Ford Motor Company family as the only vehicle brand other than Ford to be created from within the company. In the mid-1930s, management at Ford Motor Company began to identify a gap in product line between the economical Fords and the luxury Lincolns. Mercury was developed to fill that gap and bring Ford Motor Company a competitive edge.

Conceived as a balance of luxury and affordability, Mercury has proven a versatile and enduring brand over the years.

Volvo

From the world's first three-point safety belt to the world's first safety-concept car, Volvo has set the standard for automotive safety since 1927. Volvo's ongoing commitment to safety, the environment and innovation remains as strong today as it was over 80 years ago.

Brief History

Volvo was born on April 14, 1927, when the first car, 4, nicknamed ''Jakob,'' left the factory in Gothenburg. The Swedish company began over a crawfish lunch between two friends, Assar Gabrielsson and Gustaf Larson.

Volvo's first six-cylinder car, the PV651, was introduced in 1929 and quickly became the standard for taxis throughout Sweden. In 1955, Volvo began exporting to the United States, and in 1966, the Volvo 164 was named "the world's safest car."

On March 8, 1999, Volvo shareholders approved the sale of Volvo cars to the Ford Motor Company. As part of the Ford Motor Company family of brands, the new millennium started very well, with the company selling 422,100 vehicles in 2000, a record year. In 2002, the long-awaited XC90-Volvo's first true SUV-was unveiled in Detroit and won North American International Auto Show Truck of the Year in 2003.

Lincoln

Since 1921, Lincoln has remained an American icon of unparalleled luxury. Today, Lincoln continues to capture the essence of the American spirit. Like the very best of dynamic American design, Lincoln takes an unapologetic approach to luxury-one that embraces elegance, proportion and a balance of exuberance and restraint.

Brief History

Ford Motor Company acquired Lincoln Motor Company in 1922 for $8 million. Lincoln became the first "outsider" to join the Ford family of brands and initiated Ford Motor Company's entry into the field of luxury vehicles.

Lincoln's vehicle history is dominated mainly by a few evolving lines of luxury cars, including the Continental, improved with each new model year to meet the brand's goal of providing "indulgence at its finest."

More Information

Visit the Lincoln Vehicles website or call 800-521-4140

Mercury

Mercury's vehicle development continues today to strive toward the ideals of a sophisticated and clever choice for the consumer.

Brief History

Mercury is unique within the Ford Motor Company family as the only vehicle brand other than Ford to be created from within the company. In the mid-1930s, management at Ford Motor Company began to identify a gap in product line between the economical Fords and the luxury Lincolns. Mercury was developed to fill that gap and bring Ford Motor Company a competitive edge.

Conceived as a balance of luxury and affordability, Mercury has proven a versatile and enduring brand over the years.

More Information

Visit the Mercury Vehicles website or call 800-521-4140.

Volvo

From the world's first three-point safety belt to the world's first safety-concept car, Volvo has set the standard for automotive safety since 1927. Volvo's ongoing commitment to safety, the environment and innovation remains as strong today as it was over 80 years ago.

Brief History

Volvo was born on April 14, 1927, when the first car, 4, nicknamed ''Jakob,'' left the factory in Gothenburg. The Swedish company began over a crawfish lunch between two friends, Assar Gabrielsson and Gustaf Larson.

Volvo's first six-cylinder car, the PV651, was introduced in 1929 and quickly became the standard for taxis throughout Sweden. In 1955, Volvo began exporting to the United States, and in 1966, the Volvo 164 was named "the world's safest car."

On March 8, 1999, Volvo shareholders approved the sale of Volvo cars to the Ford Motor Company. As part of the Ford Motor Company family of brands, the new millennium started very well, with the company selling 422,100 vehicles in 2000, a record year. In 2002, the long-awaited XC90-Volvo's first true SUV-was unveiled in Detroit and won North American International Auto Show Truck of the Year in 2003.

More Information

Visit the Volvo website or call 800-458-1552.

Ford Motor Company Service Brands

Ford Motor Credit Company

Ford Motor Credit Company is a wholly owned subsidiary of Ford. It provides automotive financing for Ford, Lincoln, Mercury and Volvo dealers and customers.

Brief History

Ford Motor Credit Company traces its roots to 1923, when Henry Ford, unwilling to encourage consumer borrowing, experimented with a layaway plan to spur sales of the $265 Model T.

More than just a car-loan provider, Ford Credit was established so Ford Motor Company dealers could provide competitive financing services to both individuals and businesses. The brand has been integral in making ownership possible for the many customers who cannot or do not want to pay for the entire cost of a vehicle up front.

Genuine Parts and Service

Genuine Parts & Service offers the reliability of factory-trained maintenance and repairs, conveniently available through Ford, Lincoln, and Mercury dealerships-assuring superior knowledge of your vehicle.

Brief History

Ford Motor Company first introduced a Ford and Lincoln Mercury Dealership service brand in 1991 to help provide the highest level of owner satisfaction possible. Over the years, the service brand has contributed to much of the vehicle brands' success, increasing repeat purchases and strengthening owner loyalty.

Today, Genuine Parts & Service continues to grow by providing customers genuine peace of mind. From oil changes to brake service to name-brand tires, Ford, Lincoln, and Mercury owners know the dealership is the place for all their vehicle needs.

Motorcraft®

Motorcraft® premium parts are the preferred choice of Ford Motor Company. From motor oil to transmission assemblies and everything in between, Motorcraft® parts provide exceptional quality and fit.

Brief History

During the first half of the 1900's, replacement vehicle parts were, by and large, an afterthought for most new vehicle manufacturers and most replacement parts available to owners were produced by aftermarket parts companies. But we wanted to change all that.

Ford Motor Company launched this effort in 1961 by acquiring the well-known and respected Electric Autolite Company, which was already producing numerous replacement parts for Ford vehicles. In 1972, the name was changed to Motorcraft®.

Today, Motorcraft® parts are designed, engineered and recommended by Ford Motor Company for installation on Ford, Lincoln, and Mercury vehicles. http://www.ford.com/about-ford/company-information/ford-brands

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