Continuing Woes for Ford Motor Company

Anthony Fontanelle
February 5, 2007

For many years, the Ford Motor Company holds the second place as the largest car manufacturer in the US but recent financial problems led to the loosening of the company’s grip on the second spot of the leader board. Recent sales figures shows how bad the company is faring as of late and Toyota is poised to take over the company’s position this year. The last year has not been good to the Ford Motor Company showing lower number of sales figures, and to make matters worse, they started the year 2007 on a very low performance in the sales department.

The company recently announced that their sales for the month of January are down by 19 percent from last year’s figures. The company just managed to sell 166,835 units for the month of January. The decline is manifested on the 65 percent decrease of their sales to rental companies while sales to retail customers were also down but at a much lower percentage which is by 5 percent. The company’s president for the Americas, Mark Fields, stated, “All of us at Ford are focused on restructuring our business to be profitable at lower volumes and offering more of the products people want, including more cars and more crossovers”. The planned reduction of sales to daily rental companies will benefit the company’s consumers since their car’s residual value will improve.

This plan is working since Ford’s newest car is being sold to the market and has increased their resale value by as much as 11 percent. Models which have improved resale values include the 2007 Ford Fusion - up by 2 percent - and the 2007 Lincoln Navigator which improved its resale value by 6 percent. The 2007 Ford Expedition improved by 9 percent in its resale value, while the 2008 Ford Escape has improved by 11 percentage points.

The resale value of Ford’s vehicles is closing the gap between them and their Asian counterparts. One prime example is the 2007 Ford Edge crossover vehicle which has a resale value than the Toyota Highlander and the Nissan Murano.

While the sales figures are down by 19 percent for the Ford Motor Company, there are still reasons to hope. Their two crossover utility vehicles have stacked up respectable sales figures in their first full month of being in the market. Ford Edge sales amounted up to 5,586 units which is much higher than the sales figures of the Ford Fusion in its first month. The Ford Fusion manages to rack up 4,078 units in October of 2005 in its first full month on the market. The Lincoln MKX also posted a good number of units sold at 1,699.

While the company is experiencing lowering number of sales especially in their Ford F-Series pickup trucks, there is still hope that the company can turn around and go back to its winning ways. Its best-selling pickup has dropped sales by 15 percent from last year’s figures and this trend is likely to continue for the first half of the year due to the expected softness in new home construction. The company, if they hope to regain their position on the leader board, should stop the skid on their sales as efficiently as EBC brake pads can do their job well.

The decline in the sales of the Ford Motor Company is felt through all its brands except Lincoln which posted a 2.7 percent increase in its sales over last year’s figures. The largest decline is in the Ford Brand which dropped its sales from last years 169,412 units in January to this year’s 132,006 for the same month which is a drop of 22.1 percent.

Source: Amazines.com