Problems within company
The American giants have a lot of catching up to do, as most Europeans want cars that are small, stylish, and affordable. In a market that includes 27 carmakers, they have plenty of choices. And although Europeans bought a record 16.5 million cars and trucks last year, that was still 3.5 million units below production capacity. In that cut-throat environment, not everyone is going to survive. Adam Opel's subcompact $10,000 Corsa and Ford's $12,000 Fiesta, while small and affordable, lack the seductive styling of offerings from Volkswagen, Renault, and Fiat. That leaves GM and Ford struggling to improve their line-ups while cutting costs.
Declining profits and market share
It's about time Ford attacked its cost problems. The company earned only $28 million in the region last year on sales of $30 billion, while its market share fell to 9.5%, from 11.7% in 1995. This result suggests that Ford have a profit problem of serious magnitude. Ford has the capacity to make about 2.25 million vehicles in Europe but sold only 1.7 million there last year.
How to gain success
A key to cutting the increasing loss will be to cut 1,500 jobs at its largest British plant in Dagenham, where it makes the Fiesta, and reduce its capacity by about a third, to 175,000 vehicles a year. Further cuts at other European plants are likely after a detailed review is completed in a couple of months.
Methods of receiving greater sales
Ford has undertaken various strategies ensuring that it prevents a decline fall in the car market.
Being the world's second largest carmaker, Ford, has made an unprecedented promise to customers that it will reimburse them if it cuts its prices later this year. The offer is intended to reassure anyone thinking of buying now who might be hesitating because of media speculation that car prices will soon drop significantly across the board to counter allegations of price-fixing in the UK.
The company has also spent an estimated £400,000 on newspaper advertisements to try and promote the car and brand and attract new customers.
New Pricing Strategy
Due to the overwhelming pressure faced in the ever-growing car market ford have reluctantly been forced to produce a new pricing strategy. This has now meant that they have been forced to reduced prices in Britain aligning them somewhat to those prices experienced on the continent.
Conclusion
A change in pricing sttaretgy for ford seems long overdue as the company has to in some way stop its falling market share.
