FORD MOTOR COMPANY:

 

1. Company's business: what kind of business is the company engaged in?

• Henry Ford founded Ford in 1903. Its headquartered in Dearborn, Michigan, USA. It is one of the top car brands in the world and sells commercial vehicles under the Ford brand while the luxury vehicles under the Lincoln brand. 
• Ford Motor Company is an automobile company that designs, manufactures, markets, and services a full line of Ford trucks, utility vehicles, cars as well as Lincoln luxury vehicles. The Company operates in three segments: Automotive, Mobility and Ford Credit.

 

2. Company's management: CEO, CFOs, etc. 

• Chief Executive Officer (CEO)- James P. Hackett
• Executive Chairman- William Clay Ford, Jr.
• Chief Operating Officer (COO)- James D. Farley, Jr.
• Chief Financial Officer (CFO)- Timothy R. Stone
• Chief Product Development and Purchasing Officer- Hau Thai-Tang
• Chief Administrative Officer and General Counsel- Bradley M. Gayton

 

3. Company's products: what products/services does the company sell? 

• The company manufactures passenger cars and trucks as well as automotive parts and accessories.
• Automobiles: Ford Motor Company sells a broad range of automobiles worldwide and an additional range of luxury automobiles in the United States.
•  Trucks: Ford has produced trucks since 1908, beginning with the Ford Model TT, followed by the Model AA, and the Model BB. Countries where Ford commercial vehicles are or were formerly produced include Argentina, Australia, Brazil, Canada, France, Germany, India, Netherlands, Philippines, Spain, Turkey, UK, and the United States. 
• Buses: Ford manufactured complete buses in the company's early history, but today the role of the company has changed to that of a second stage manufacturer. 
• Tractors: Ford company is engaged in the manufacturing of tractors as well.
• Financial services: Ford offers automotive finance through Ford Motor Credit Company.
• Automotive components: Ford's FoMoCo parts division sells aftermarket parts under the Motorcraft brand name. It has spun off its parts division under the name Visteon.

 

4. Company's market

• Yes, the company have the international footprint.
• At about 1.7 million units, the U.S. is the number one sales market for the Ford Motor Company. Globally, sales declined by about 245,000 units between 2020 and 2021.
• China is Ford's second largest market. 
• Automotive: Ford earns the vast majority of its revenue by selling vehicles, service parts, and accessories around the world under the Ford and Lincoln brands. The automotive segment includes revenues and costs related to development, manufacture, distribution, service, and electrification vehicle programs. It also sells vehicles wholesale to dealers and distributors in five major geographical segments: North America, South America, Europe, China (including Taiwan), and International Markets Group. With Q2 2021 revenues of $24.1 billion, Ford's Automotive segment accounted for 90.2% of revenues for Q2 2021. Automotive revenues grew by 45.1% YOY in that quarter, the second-fastest rate among Ford's three operating segments.
• Mobility: Ford's Mobility segment includes development costs for the development and production of autonomous vehicles. It also includes Ford's equity ownership of Argo AI, a developer of autonomous driving systems, and investments in Spin, a micro-mobility service provider. Mobility is the smallest of Ford's segments by revenue. It generated just $21 million of revenue for Q2 2021, or about 0.1% of total quarterly revenue. It was the fastest-growing segment by revenue, tripling YOY for that period, though that growth was off of an extremely small base.
• Ford Credit: The Ford Credit segment is comprised of the company's vehicle-related financing and leasing operations. The company offers a variety of automotive financing products to and through dealers worldwide. Most of the Ford Credit business involves financing of vehicles, supporting dealer operations, and lease contracts. Ford Credit posted quarterly revenue of $2.6 billion for Q2 2021, or roughly 9.7% of total revenues. This figure was down by 5.0% YOY, making Ford Credit the only one of the company's operating segments to see declining revenues YOY for the quarter.² Despite that, Ford Credit generated adjusted EBIT of $1.6 billion in Q2 2021, nearly tripling YOY, as it benefited from the rebound in vehicle sales compared to a year earlier. It was the only operating segment to report positive adjusted EBIT in the quarter.

 

 

5. What are the company's main suppliers? Where are the company's products manufactured? 

 

Main suppliers: 

• Some of the key suppliers for Ford Motor Company (F) include Flex-N-Gate Seeburn, NHK Spring, and Valeo Electric and Electronic Systems.
• Indirect suppliers include FedEx, Union Pacific, and Roush.

Location of products manufactured:

• Ford has had manufacturing operations worldwide, including in the United States, Canada, Mexico, China, India, the United Kingdom, Germany, Turkey, Brazil, Argentina, Australia, and South Africa.

 

 

6. Company's industry: provide detailed information on the company's industry. Also, discuss the 
company's main peers. Provide information on the total sales (revenue) in the industry, and how 
much of this pie the company accounts for. 

 

Industry: Ford motor company operates in the AUTOMOBILE INDUSTRY.

• The automotive industry comprises a wide range of companies and organizations involved in the design, development, manufacturing, marketing, and selling of motor vehicles. It is one of the world's largest industries by revenue. It is also the industry with the highest spending on Research & Development.
• The automotive industry began in the 1860s with hundreds of manufacturers that pioneered the horseless carriage. For many decades, the United States led the world in total automobile production. In 1929, before the Great Depression, the world had 32,028,500 automobiles in use, and the U.S. automobile industry produced over 90% of them. At that time, the U.S. had one car per 4.87 persons.
• After 1945, the U.S. produced about 75 percent of world's auto production. In 1980, the U.S. was overtaken by Japan and then became world leader again in 1994. In 2006, Japan narrowly passed the U.S. in production and held this rank until 2009, when China took the top spot with 13.8 million units
•  With 19.3 million units manufactured in 2012, China almost doubled the U.S. production of 10.3 million units, while Japan was in third place with 9.9 million units. From 1970 (140 models) over 1998 (260 models) to 2012 (684 models), the number of automobile models in the U.S. has grown exponentially.
• Early car manufacturing involved manual assembly by a human worker. The process evolved from engineers working on a stationary car, to a conveyor belt system where the car passed through multiple stations of more specialised engineers. Starting in the 1960s, robotic equipment was introduced to the process, and today most cars are produced largely with automated machinery.

Company's main peers: Following is the list of main peers of the Ford Motor Company:

• Toyota
• Volkswagen Group
• Hyundai
• General Motors
• Nissan
• Honda
• Fiat Chrysler Automobiles
• Renault
• PSA Group
• Suzuki
• BMW 

Total sales revenue in industry: $1.249 trillion.

Ford's share: 13.87%

 

7. Opportunities & Risks

 

Opportunities for Ford Motor Company: 

• Eco-Friendly Vehicles - As Ford is already trying to be technologically adaptive, they have a fantastic opportunity to produce fuel-efficient cars and commercial vehicles. For example, they can build vehicles that run on different forms of energy. In this way, they have more options in designing eco-friendly vehicles. The 2018's C-Max and Fusion Hybrid car model can be their most significant opportunity, as they have already captured the market with this new model.
• Increase Customer Base - Ford is already working on penetrating the automobile market in India and China, they have an excellent opportunity to tap into other small countries in the world and grow their customer base. From July to September 2020, Ford's sales in China rose by 25% to 164,352 units, which indicates the company's growing customer base in Asia.
• Digital Marketing - Digital marketing is prevailing all over the world these days, so Ford has an opportunity to work on their digital marketing skills to grow its customer and supplier engagements.
• Self-driving car - In 2017, Ford has invested $1 Billion in Artificial intelligence company, Argo AI, to develop its self-driving technology. In addition, Ford has partnered with Walmart and Postmates to test the future of grocery delivery. Ford announced that it would introduce the "Active 2.0 Prep Package" in its Mach-E model that allows for hands-free driving in certain situations. Cars with this semi-self-driving technology will be available in the market by the second half of 2021.
• Expand into Related Fields - Ford has extensive experience in different sectors related to the auto industry. The company's new CEO, Jim Farley, recently announced that it would be expanding operations into software, fleet management, electric vehicle charging, and other related technology fields.
• Global Recognition - Ford is a well-known brand in the automobile industry and is also recognized in the global markets because of its success in marketing and advertising. It operates two brands under Ford Motor Company i.e. Ford and Lincoln. Its brand value is $10.44 billion according to the 2021 report of Statista.
• Automotive Segment - Ford is currently the second-largest automaker in the U.S. (behind GM) and fifth largest (behind Toyota, Volkswagen, Hyundai, GM) in the world.
• Diverse Offerings - Ford caters to all kinds of demographic groups with their diversified brands and car models. They take care of the needs and wants of their consumers by providing them with more variety of cars and commercial vehicles.
• Adaptability - Ford has a wide product and services portfolio which gives them strong leverage and less dependency on just one product range. Their commitment to adopting new technologies also gives them a boost in the competitive automobile market. They are also working on light weighting, cabin technology, and powertrain to enhance their product quality. 
• Huge Network of Dealers- The company is also diverse in its operations and distribution, as they have a huge network of about 10,717 dealers across the world. Ford develops its cars on standardized procedures. They also invest heavily in various fuel sources.
• Strong Financial Position - Ford's strong financial position driven by the demand for pickups and SUVs. In 2020, the company has posted a better-than-expected annual revenue of $127 Billion. The fact that Ford is going strong despite the turmoil in 2020 highlights the company's growth in the future will be even bigger

Risks for Ford Motor Company: 

• High Competition - Ford is already facing cut-throat competition from its rival companies like Toyota, Tesla, and Tata. Ford keeps struggling to maintain its innovative position in the industry.
• Increased Prices of Raw Materials - The rising raw material prices of steel and steel coil can directly affect the company's cost and profit margin.
• Regulations and compliance - The compliance and regulatory threats for automobile brands have increased in the past years because of environmental improvements going around the world. Vehicles are now inspected for public safety and quality issues. Ford can face serious challenges if it fails to comply with the new regulations. Ford is facing a civil lawsuit in the US Supreme Court after it was sued by two people who were injured in crashes involving second-hand Ford vehicles.
• Market uncertainties - In the first quarter of 2020, market uncertainties globally hammered Ford very hard, leading to a decline in sales to 516,330 total vehicles, which lower by 12.5% compared to the same period in 2019. It has been affected more adversely than its rivals General Motors and Fiat Chrysler. Market uncertainties also forced Ford's German branch to apply for a $582 million loan from the German government to cushion the impact of the decline in sales.
• Strong Labor Unions - Canadian autoworkers union is growing stronger and using its influence against automakers operating in the country like Ford. In 2020, the union threatened to strike if Ford did not invest to safeguard its employment in the long-term. To avoid the strike, Ford was forced to invest $1.4 billion in its Oakville and Windsor plants in Canada as part of the deal with the union.
• Ford shuts down manufacturing plants in India & Brazil - Ford has stopped its automotive manufacturing operations in India. It means that Ford will stop selling Figo, Aspire, Freestyle, Ecosport, and Endeavor in India. However, Ford will continue to run its business solution, engineering, and customer support operations in India. Similarly, Ford has closed 3 manufacturing plants in Brazil in 2021.