In FY2008, Ford launched the ‘Blind Spot Mirror’. The Blind Spot Mirror is a traditional side view mirror designed with a secondary convex spotter in the top outer corner, which provides a view of the driver's blind spot. When traffic enters the driver's blind spot on either side of the vehicle, it is visible in the secondary convex mirror, alerting the driver of potential danger. In the same year, Ford introduced accident-assistance feature, 911 Assist in its SYNC.The company partnered with National Emergency Number Association (NENA) to improve the delivery of critically important emergency services. In the event of an accident involving the activation of an air bag or the emergency fuel cutoff, 911 Assist helps vehicle occupants in placing a call directly to a local 911 emergency operator.
Also in 2008, for the 2009 Escape and Mariner, Ford redesigned the front bumper spoiler and added rear tire spoilers for better airflow management. Aerodynamic refinements are the most cost-effective ways to reduce fuel consumption. The company's strong engineering capabilities allow it to broaden its product portfolio and remain in the forefront of the automotive industry (www.nydailynews.com).
High employee productivity
Ford has registered stronger revenue per employee, as compared to its competitors. In FY2008, the company recorded total revenues of $146,277 million and employed a total of 213,000 employees. The company's revenue per employee at $686,746.5 is higher than that of its competitors such as Fiat, Volkswagen and General Motors. The revenue per employee of Fiat stood at $440,479.2 in FY2008, significantly lower than Ford. Similarly, revenue per employee of Volkswagen stood at $452,656.5; and revenue per employee of General Motors stood at $613,082.3 during the same period. Relatively strong revenue per employee indicates the company's operational efficiency and stronger productivity.
Achievements
Ford received many awards from media, and independent evaluators in response to the products it introduced in 2008. The company’s new 2009 Ford F-150 introduced in the fourth quarter of 2008 was named Motor Trend magazine’s Truck of the Year and was also awarded the title of North American Truck of the Year at the North American International Auto Show in January 2009.
Weaknesses
Poor financial performance
Ford has witnessed declining revenues in FY2008 when compared to 2007. The company recorded revenues of $146,277 million in FY2008, a decrease of 15.2% compared to 2007. The decrease in revenues was due to lower volumes and lower revenues of Jaguar Land Rover. The operating loss of the company was $4,130 million during FY2008 when compared to operating profit of $5,631 million in 2007. The operating margin of the company decreased from 3.3% in 2007 to -2.8% in 2008. The net loss was $14,672 million in FY2008 when compared to net loss of $2,723 million in 2007. The net loss margin increased from 1.6% in 2007 to 10% in 2008. Poor financial performance of the company disables the company to seek more growth avenues in the future and may also dent the investors’ confidence (www.nytimes.com/).
Sluggish performance of Ford in geographic regions
Ford witnessed sluggish performance in its sales in all its geographic regions, including North America, Europe and all other regions. North America, which is the largest geographic market for the company, accounted for 48.5% of the total revenues in FY2008. Revenues from North America reached $70,990 million in FY2008, a decline of 23.7% compared to 2007. Europe, Ford’s second largest geographic market accounted to $56,717 million in FY2008, a decline of 5.5% compared to 2007. Similarly, all other regions declined 4% to reach $18,570 million in FY2008. Therefore, poor performance of Ford in all its geographic regions may eventually affect the company’s financial performance.
Opportunities
Growth potential in China and India
The Chinese and Indian new cars markets witnessed a strong growth in recent years and the trend is likely to continue in the future. The Chinese new cars market grew by 14.2% in 2008 to reach a value of $98 billion. Market consumption volumes increased by 17.8% to reach a total of 7.4 million units in 2008. The market's volume is expected to rise to 13 million units by the end of 2013. The Chinese new cars market is forecast to reach a value of $155.2 billion, an increase of 58.4% since 2008.
Increasing demand for hybrid electric vehicles
Worldwide demand for light hybrid electric vehicles (HEVs) is expected to increase. It is expected to increase to 800,000 units in 2009 and estimated to reach 4.5 million units in 2013. Rising energy costs and increased emissions regulations are likely to increase demand for HEVs. The US is expected to experience the highest level of demand for HEVs, estimated at two million units in 2013. Global problems that include the environmental challenges of global warming and the need to conserve resources and energy are the key drivers for the company’s to develop HEVs. In order to meet the demand Ford is continuously focused on developing new high technology products for hybrid electric vehicles.
In 2012, Ford would deliver its third generation of hybrid vehicles, including a plug-in version. In addition, Ford is also working with Southern California Edison, the Electric Power Research Institute and six additional electric utility companies from New York, Atlanta, Detroit and Raleigh to develop plug-in hybrid vehicles and infrastructure.Therefore, a positive outlook for light hybrid electric vehicles market would boost demand for Ford’s products.
Threats
Forecasted recession in North America and Europe
Ford has presence primarily in North America, Europe and all other regions. North America is the largest geographical market of the company. Ford generates 48.5% of its total revenues from the North America and 38.8% of total revenues from Europe. The profitability of the automotive business is tied to the performance of the economy in which the company operates. Healthy economic growth is therefore a precondition for the positive growth rate of the business.
References
Carty, Sharon S. "'Reality' of market share Ford's focus." Usa Today. 01 Oct. 2006. 10 Oct. 2008 <http://www.usatoday.com/money/autos/2006-01-10-ford-usat_x.htm>.3
Vlasic, Bill. "At Ford, End of a Big-Vehicle Era Takes a Toll." The New York Times. 25 July 2008. 10 Oct. 2008 <http://www.nytimes.com/2008/07/25/business/25ford.html?_r=1&hp&oref=slogin>.4
"Auto sales tank in April but Chrysler bucks trend." CNN Money. 01 May 2008. 10 Oct. 2008 <http://money.cnn.com/2007/05/01/news/companies/autosales/index.htm>.5
Bureau of Labor Statistics. 05 Sept. 2008. 10 Oct. 2008 <http://www.bls.gov/ro3/apwb.htm>. 6
"Feds warns Ford owners about recalled vehicles." Daily News. 09 Sept. 2008. 10 Oct. 2008 <http://www.nydailynews.com/money/2008/09/09/2008-09-09_feds_warns_ford_owners_about_recalled_ve.html>. 10
