COURSE- MARKETING MANAGEMENT

COURSE CODE- MG221

TOPIC- SITUATIONAL ANALYSIS: FORD MOTOR COMPANY

SUBMITTED TO: -

MRS. AMITA SHARMA

ASSISTANT PROFESSOR
ILS

SUBMITTED BY: -
AMAN PRASHAR
BBA LLB 2ND YEAR
21FLICDDN01002
 FORD MOTOR COMPANY

INTRODUCTION

FORD MOTOR COMPANY known to masses as ‘FORD’ is an American multinational

automobile manufacturer headquartered in Dearborn, Michigan, United States. It was
founded by Henry Ford and incorporated on June 16,1903. The company sells automobile
and commercial vehicles under the Ford brand, and luxury cars under its Lincoln luxury
brand. The company also owns an 8% stake in Aston Martin of the United Kingdom and 32%
stake in China’s Jiangling Motors. It also has joint ventures in China, Taiwan, Thailand, Turkey,
and Russia. The company is listed on the New York Stock Exchange and is controlled by the Ford
family; they have minority ownership but most of the voting power.

Ford introduced methods for large-scale manufacturing of cars and large-scale management
of an industrial workforce using elaborately engineered manufacturing sequences typified by
moving assembly lines; by 1914, these methods were known around the world as Fordism.
Ford's former UK subsidiaries Jaguar and Land Rover, acquired in 1989 and 2000
respectively, were sold to the Indian automaker Tata Motors in March 2008.

Ford is the second-largest U.S- based automaker (behind General Motors) and fifth-largest in
the world (behind Toyota, Volkswagen, Hyundai, and General Motors) based on 2015
vehicle production. The company went public in 1956 but the Ford Family, through special
Class B shares, still retain 40 percent of the voting rights. Ford motors company famous in
India for its vehicles like Endeavour and EcoSport recently exited the Indian market as the
sales were not high in the country as was expected from the Indian market.

Ford was the company which gave the world the first mass produced car “MODEL T.” This
car was introduced in 1908. Henry Ford wanted the MODEL T to be affordable, simple to
operate and durable. The Ford achieved its aim of manufacturing the universal car, through
this car. In 1909 the new car costed around $850 and till 1924 the cost had come down to
only $260. The average assembly line worker could easily purchase one car with his four
month’s pay in 1914. The Model T would go an average on 13 to 21 miles on a gallon of gas.
It had a 20 horsepower, four-cylinder engine, reached a top speed of about 45 miles per hour.

This situational analysis would describe Ford Motor Company in detail.

1.ABOUT THE COMPANY: FORD MOTOR COMPANY

1.1 PROMOTERS OF THE COMPANY

Its often a confusion as to who owns who in the automotive world. Often, multiple brands are
owned by a single large company and in surprising ways. When climbing up the ladder of
ownership, Ford Motor Company sits above Ford and Lincoln.

Ford Motor Company is not owned by another corporation; instead, it is only owned by
shareholders. Since the shareholders are collectively the owners of the company, those with
more shares technically own more of Ford Motor Company.

TOP SHAREHOLDERS

 William Clay Ford Jr.

William Bill Clay Ford Jr. is the great grandson of Henry Ford himself, and currently holds
the position of Executive Chairman at Ford Motor Company as of march 2018, Bill owns 6.8
million shares of the common Ford Motor Company stock.

 Mark Field

Mark Field was pushed out of the CEO position in 2017, he worked at Ford Motor Co. for
about 28 years. As of his march 2017 filing he holds 1.78 million shares of the Ford Motor
Company, making him the second largest shareholder in the company.

 Joseph R. Hinrichs

As of Joseph R. Hinrichs’s march 2018 SEC filing, Joseph R. Hinrichs comes in as the third
largest Ford Shareholder with 645,155 shares of the company. Joseph has been the executive
vice president and president of global operations, Ford Motor Company since June 1, 2017.

Top 10 owners of FORD MOTOR COMPANY

The Vanguard Group, Inc. 8.00% 315,733,631 4,221,358,646 +3,941,528 +1.26%

BlackRock Fund Advisors 4.46% 176,272,847 2,356,767,964 -1,985,125 -1.11%

SSgA Funds Management, Inc. 4.30% 169,961,013 2,272,378,744 +1,119,620 +0.66%

Newport Trust Co. 3.80% 149,968,792 2,005,082,749 +1,745,702 +1.18%

Geode Capital Management LLC 1.77% 69,715,133 932,091,328 +350,399 +0.51%

Fisher Asset Management LLC 1.14% 44,970,209 601,251,694 +44,867,359 +43,624.07%

Northern Trust Investments, Inc. 0.99% 39,212,653 524,273,171 -160,701 -0.41%

Norges Bank Investment

0.95% 37,560,363 502,182,053 -832,070 -2.17%
Management

BlackRock Advisors (UK) Ltd. 0.70% 27,726,205 370,699,361 -858,316 -3.00%

Dimensional Fund Advisors LP 0.64% 25,384,739 339,393,960 +668,984 +2.71%

MANAGERS

NAME TITLE AGE SINCE

JAMES FARLEY PRESIDENT, CEO, DIRECTOR&PRES. 59 2022
MODEL E
JOHN LAWLER CFO FORD ASIA PACIFIC & AFRICA 55 1990
DOUGLAS FIELD CHIEF ADVANCE TECHNOLOGY OFF. - 2021
MICHAEL AMEND CHIEF DIGITAL & INFO OFFICER 43 2021
BETH ROSE CHIEF COMPLIANCE, ETHICS & - 2019
INTEGRITY OFFICER
LYNN ANTIPASS EXECUTIVE DIRECTOR-INVESTOR - 2017
RELATIONS
DAVID WEBB TREASURER - 2019
JONATHAN SECRETARY - 2016
SUZY DEERING CHIEF MARKETING OFFICER - 2021
FREDRICK T. PRESIDENT-GLOBAL FORD CUSTOMER 62 --
SERVICE DISTRIBUTION
MEMBERS OF THE BOARD

NAME TITLE AGE SINCE

WILLIAM FORD VP& HEAD-COMMERCIAL TRUCK 64 1994
VEHICLE CENTRE
JOHN THORNTON INDEPENDENT DIRECTOR 68 1996
KIMBERLY A. INDEPENDENT DIRECTOR 64 2003
WIILIAM W. H INDEPENDENT DIRECTOR 62 2011
WILLIAM K INDEPENDENT DIRECTOR 64 2015
JOHN WEINBERG INDEPENDENT DIRECTOR 64 2016
LYNN V. INDEPENDENT DIRECTOR 53 2017
JOHN B. V INDEPENDENT DIRECTOR 65 2017
BETH MOONEY INDEPENDENT DIRECTOR 66 2019
JOHN MAY INDEPENDENT DIRECTOR 51 2021

Ford Motor Company was the eleventh ranked overall American-based company in the 2018
fortune 500 list, based on global revenues 2017 of $156.7 billion. In 2008 Ford produced 5.32
million automobiles and employed about 213,000 employees at around 90 plants and
facilities worldwide. During financial crisis 2007 the company suffered financially but did
not have to be rescued by the federal government, unlike the other major automakers of the
Us. Ford has since returned to profitability.

1.2 VISION OF THE COMPANY/VISION STATEMENT

Ford’s corporate vision is “to become the world’s most trusted company, designing smart
vehicles for a smart world.” This vision statement reflects the multinational company’s
strategic goal of becoming a leader in the automotive industry. Ford’s focus on smart vehicles
is pertinent to current market conditions and customers’ preferences. The company aims to
maximize its profitability and relevance to the market, where more efficient technologies are
preferred. The following are the main components of Ford’s corporate vision statement:

1. Worldwide scale

2. Most trusted company

3. Designing smart vehicles for a smart world

The vision statement’s first component (worldwide scale) is a specification of Ford’s target
market, which is the global market for automobiles. On the other hand, through the second
component, the corporate vision pertains to corporate or brand image, which influences the
attractiveness and profitability of the company’s automobiles. For example, customers’
confidence in and preference for Ford electric cars depend on how these vehicles’ brand
value is perceived. In relation, the corporate vision statement indicates that the corporation is
focused on smart vehicles. This focus implies a strategic response to the industry’s electric
car trend, as discussed in the PESTEL/PESTLE analysis of Ford Motor Company. Thus, the
corporate vision statement ensures that the company is abreast of the latest technologies
suited to current market trends.

Corporate Vision Statement. Ford Motor Company’s vision statement is concise, future-
oriented, and inspirational, while describing the business as a developer of smart vehicles.
The vision statement’s specification of smart vehicles complements the corporate mission
statement by providing a more detailed picture of what the company does. Also, Ford’s
corporate vision is challenging and abstract enough to drive the business organization toward
high performance. To achieve this corporate vision’s aim of becoming the world’s most
trusted company, it is essential to strengthen the enterprise through enhancement or creation
of competitive advantages, such as the ones shown in the SWOT analysis of Ford Motor
Company. Also, achieving the corporate vision statement requires strategic initiatives for
making the automotive brand attractive to target customers. Thus, a recommendation based
on the vision statement is to develop Ford’s marketing mix or 4Ps in a way that strengthens
customers’ trust in the company. Moreover, it is recommended that the company include
more information about the strategic direction of the automotive business, to make the
corporate vision statement more effective in guiding management and human resources
toward the desired business goals.

1.3 MISSION OF THE COMPANY/MISSION STATEMENT

Ford’s corporate mission is “to make people’s lives better by making mobility accessible and
affordable.” This mission statement focuses on moving people, which is a basic function
expected in automobiles and the transportation sector. Such emphasis on mobility indicates
the purpose of Ford’s business in society. As one of the biggest players in the international
market, the company aims to make people’s transportation more effective. The following are
the main components of Ford’s corporate mission statement:

1. Make people’s lives better

2. Make mobility accessible

3. Make mobility affordable

The mission statement’s first component (make people’s lives better) is a factor in Ford
Motor Company’s value proposition to its target customers. For example, the company’s
goals are directed toward improving people’s lives. To make such improvement specific,
Ford’s corporate mission statement includes the other two components. The company’s
strategic plans address accessibility and affordability of mobility to make people’s lives
better. Thus, accessibility and affordability are variables in assessing Ford’s fulfilment of its
value proposition. With this corporate mission statement, the automotive business sees its
role as a contributor to the improvement of transportation to enhance quality of life.
Considering strategic management objectives, the affordability component of the corporate
mission statement depends on selling prices and production costs, which are linked to Ford’s
generic strategy for competitive advantage and intensive growth strategies.

Corporate Mission Statement. Ford Motor Company’s corporate mission statement is brief
and a general description of the business. For example, the corporate mission focuses on
making accessible and affordable mobility, inclusive of automobiles. The general term,
“mobility,” is indicative of Ford’s future product development, which could include mobility
technologies other than automobiles. The company could develop personal flying vehicles,
and new mobility products for transporting small parcels. Overall, the corporate mission
statement is descriptive enough to guide strategic management in terms of what Ford’s
business does and should do, and aligns with the corporate vision statement. A
recommendation is to improve the corporate mission by including information about the
company’s target markets, customers, mobility technologies, and business philosophy and
values as an automotive enterprise. It is notable that the corporate mission statement’s focus
on improving people’s lives relates to Ford Motor Company’s corporate social responsibility
strategy and stakeholder management, in terms of business contributions to societal
improvement.

1.4 HISTORICAL BACKGROUND OF THE COMPANY

The Ford Motor Company is an American automaker, the world's fifth largest based
on worldwide vehicle sales. Based in Dearborn, Michigan, a suburb of Detroit, it was
founded by Henry Ford on June 16, 1903. Ford Motor Company would go on to become one
of the largest and most profitable companies in the world, as well as being one of the few to
survive the Great Depression. The largest family-controlled company in the world, the Ford
Motor Company has been in continuous family control for over 110 years. Ford now
encompasses two brands: Ford and Lincoln. Ford once owned 5 other luxury brands: Volvo,
Land Rover, Jaguar, Aston Martin, and Mercury. Over time, those brands were sold to other
companies and Mercury was discontinued.

Henry Ford built his first automobile, which he called a quadricycle, at his home in Detroit in
1896. The location has been redeveloped, where the Michigan Building now stands, and the
tracks for the Detroit People Mover and the Times Square People Mover station are nearby.
At the entrance to the Michigan Building, there is a commemorative plaque identifying the
original location of the Ford home. The coal shed has been recreated using the original bricks
at Greenfield Village in nearby Dearborn. His initial foray into automobile manufacturing
was the Detroit Automobile Company, founded in 1899. The company foundered, and in
1901 was reorganized as the Henry Ford Company. In March 1902, after falling out with his
financial backers, Ford left the company with the rights to his name and 900 dollars.

Henry Ford turned to an acquaintance, coal dealer Alexander Y. Malcomson, to help finance
another automobile company. Malcomson put up the money to start the partnership "Ford and
Malcomson" and the pair designed a car and began ordering parts. However, by February
1903, Ford and Malcomson had gone through more money than expected, and the
manufacturing firm of John and Horace Dodge, who had made parts for Ford and
Malcomson, was demanding payment. Malcomson, constrained by his coal business
demands, turned to his uncle John S. Gray, the president of the German-American Savings
Bank and a good friend. Malcomson proposed incorporating Ford and Malcomson to bring in
new investors, and wanted Gray to join the company, thinking that Gray's name would attract
other investors. Gray was not interested at first, but Malcomson promised he could withdraw
his share at any time, so Gray reluctantly agreed. On the strength of Gray's name, Malcomson
recruited other business acquaintances to invest, including local merchants Albert Strelow
and Vernon Fry, lawyers John Anderson and Horace Rackham, Charles T. Bennett of
the Daisy Air Rifle Company, and his own clerk James Couzens. Malcomson also convinced
the Dodges to accept stock in lieu of payment.

On June 16, 1903, the Ford Motor Company was incorporated, with 12 investors owning a
total of 1000 shares. Ford and Malcomson together retained 51% of the new company in
exchange for their earlier investments. When the total stock ownership was tabulated, shares
in the company were: Henry Ford (255 shares), Alexander Y. Malcomson (255 shares), John
S. Gray (105 shares), John W. Anderson (50 shares), Horace Rackham (50 shares), Horace E.
Dodge (50 shares), John F. Dodge (50 shares), Charles T. Bennett (50 shares), Vernon C. Fry
(50 shares), Albert Strelow (50 shares), James Couzens (25 shares), and Charles J. Woodall
(10 shares).

At the first stockholder meeting on June 18, Gray was elected president, Ford vice-president,
and James Couzens secretary. Despite Gray's misgivings, the Ford Motor Company was
immediately profitable, with profits by October 1, 1903, of almost $37,000. A dividend of
10% was paid that October, an additional dividend of 20% at the beginning of 1904, and
another 68% in June 1904. Two dividends of 100% each in June and July 1905 brought the
total investor profits to nearly 300% in just over two years; 1905 total profits were almost
$300,000.
However, there were internal frictions in the company that Gray was nominally in charge of.
Most of the investors, both Malcomson and Gray included, had their own businesses to attend
to; only Ford and Couzens worked full-time at the company. The issue came to a head when
the principal stockholders, Ford and Malcomson, quarrelled over the future direction of the
company. Gray sided with Ford. By early 1906 Malcomson was effectively frozen out of the
Ford Motor Company, and in May sold his shares to Henry Ford. John S. Gray died
unexpectedly in 1906, and his position as Ford's president was taken over by Ford himself
soon afterward.

Ford was subject to lawsuits or threats from the Association of Licensed Automobile
Manufacturers early in its history. The association claimed patent rights to most gasoline-
powered automobiles. After several years of legal wrangling, the association eventually
dropped its case against Ford in 1911.

1.5 BUSINESS PLAN FOR NEXT FIVE YEARS

 Accelerating the introduction of connected, smart vehicles and services customers

want and value. By 2019, 100 percent of Ford’s new U.S. vehicles will be built with
connectivity. The company has similarly aggressive plans for China and other
markets, as 90 percent of Ford’s new global vehicles will feature connectivity by
2020.

 Rapidly improving fitness to lower costs, release capital and finance growth. Ford is
attacking costs, reducing automotive cost growth by 50 percent through 2022. As part
of this, the company is targeting $10 billion in incremental material cost reductions.
The team also is reducing engineering costs by $4 billion from planned levels over the
next five years by increasing use of common parts across its full line of vehicles,
reducing order complexity and building fewer prototypes.

 Allocating capital where Ford can win the future. This starts with the company
reallocating $7 billion of capital from cars to SUVs and trucks, including the Ranger
and EcoSport in North America and the all-new Bronco globally. Ford also has plans
to build the next-generation Focus for North America in China, saving capital
investment and ongoing costs. Further, Ford is reducing internal combustion engine
 capital expenditures by one-third and redeploying that capital into electrification – on
top of the previously announced $4.5 billion investment.

 Embracing partnerships. Ford will continue to leverage partnerships, remain active in

M&A and collaborate to accelerate R&D. The company recently announced it was
exploring a strategic alliance with Mahindra Group as it transforms its business in
India, and Zoyte with the intention of developing a new line of low-cost all-electric
passenger vehicles in China. When it comes to autonomous vehicle development, the
company recently announced a relationship with Lyft to work toward
commercialization and a collaboration with Domino’s Pizza to research the customer
experience of delivery services.

 Expanding electric vehicle revenue opportunities. The company recently announced a

dedicated electrification team within Ford, focused exclusively on creating an
ecosystem of products and services for electric vehicles and the unique opportunities
they provide. This builds on Ford’s earlier commitment to deliver 13 new electric
vehicles in the next five years, including F-150 Hybrid, Mustang Hybrid, Transit
Custom plug-in hybrid, an autonomous vehicle hybrid, Ford Police Responder Hybrid
Sedan, and a fully electric small SUV.

 Reducing orderable combinations of many nameplates, focusing on what customers

value most. Already the team has identified a ten-fold reduction of orderable
combinations in the next-generation Escape and is moving from approximately
35,000 combinations in the current generation of Fusion to 96 in the next generation.
 Rethinking product development processes and incorporating new technology. In the
next five years, Ford is aiming to reduce new vehicle development time by 20 percent,
with new tools and fewer orderable combinations. Using virtual assembly lines, the
company has been able to reduce new model changeover time by 25 percent.
 Redesigning the company’s factories of the future. Accelerating and scaling 3D
printing, robotics, virtual reality tools and big data will improve logistics and enable a
more efficient manufacturing footprint.
1.6 SKILLS OF THE FIRM

RESEARCH & DEVELOPMENT

Ford Research and Innovation Center is the name of the technology research facilities of Ford
Motor Company in

 Dearborn, Michigan
 Palo Alto, California
 Aachen, Germany
 Nanjing, China

The Ford Research and Innovation Center in Palo Alto was first opened in 2012, and in
January 2015, announced plans to significantly expand its operations.

PRODUCT&SERVICES

Automobiles

Ford Motor Company sells a broad range of automobiles under the Ford marque worldwide,
and an additional range of luxury automobiles under the Lincoln marque in the United States.
The company has sold vehicles under several other marques during its history.
The Mercury brand was introduced by Ford in 1939, continuing in production until 2011
when poor sales led to its discontinuation. In 1958, Ford introduced the Edsel brand, but poor
sales led to its discontinuation in 1960. In 1985, the Merkur brand was introduced in the
United States to market products produced by Ford of Europe; it was discontinued in 1989.

Ford acquired the British sports car maker Aston Martin in 1989, later selling it on March 12,
2007, although retaining an 8% stake. Ford purchased Volvo Cars of Sweden in 1999, selling
it to Zhejiang Geely Holding Group in 2010.
In November 2008, it reduced its 33.4% controlling interest in Mazda of Japan to a 13.4%
non-controlling interest. On November 18, 2010, Ford reduced their stake further to just 3%,
citing the reduction of ownership would allow greater flexibility to pursue growth in
emerging markets. Ford and Mazda remain strategic partners through exchanges of
technological information and joint ventures, including an American joint venture plant
in Flat Rock, Michigan called Auto Alliance. In 2015, Ford sold its remaining 3% stake in
Mazda. Ford sold the United Kingdom-based Jaguar and Land Rover companies and brands
to Tata Motors of India in March 2008. On April 25, 2018, Ford announced that it planned to
phase out all but one of its North American automobile models (the Mustang will be the sole
surviving model) to focus primarily on trucks and SUVs. Ford had also planned to introduce
an "Active" crossover version of the next-generation Focus, but cancelled those plans due to
tariff issues between the United States and China.

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 (also badged as Mercury),
France, Germany, India, Netherlands, Philippines, Spain (badged Ebro too), Turkey, UK
(badged also Fordson and Thames), and the United States.

From the 1940s to the late 1970s, Ford's Ford F-Series was used as the base for light trucks
for the North American market.

Most of these ventures are now extinct. The European one that lasted longest was the lorries
arm of Ford of Britain, which became part of the Iveco group in 1986. Ford had a minority
share in the new company and Iveco took over sales and production of the Ford Cargo range.
Ford's last significant European truck models were the Transcontinental and the Cargo. At the
end of 1996, Ford sold the rights to its heavy trucks division to the Freightliner
Trucks division of Daimler AG, with Ford producing the Cargo, Louisville, and Aeromax,
through the 1998 model year. During the 1998 model year, Freightliner began production of
its own versions of Ford-developed trucks in St. Thomas, Ontario, launching
the Sterling truck brand. Slotted between Freightliner and Western Star, Sterling trucks were
produced through 2009.
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. In North America, the E-
Series is still used as a chassis for small school buses and the F-650 is used in commercial
bus markets. In the 1980s and 1990s, the medium-duty B700 was a popular chassis used by
school bus body manufacturers including Thomas Built, Ward, and Blue Bird, but Ford lost
its market share due to industry contraction and agreements between body manufacturers.
Older bus models included:

Prior to 1936, Ford buses were based on truck bodies:

 Model B – 1930s
 Model T – 1920s
 F-105 school bus

In 1936, Ford introduced the Ford Transit Bus, a series of small transit buses with bodies
built by a second party. Originally a front-engine design, it was modified to a rear-engine
design in 1939. About 1,000 to 1,200 of the original design were built, and around 12,500 of
the rear-engine design, which was in production until 1947 (rebranded as the Universal Bus
in 1946).

Tractors

The "Henry Ford and Son Company" began making Fordson tractors in Henry's hometown of
Springwells (later part of Dearborn), Michigan, from 1907 to 1928, from 1919 to 1932,
at Cork, Ireland, and between 1933 and 1964 at Dagenham, England, later transferred
to Basildon. They were also produced in Leningrad beginning in 1924.Ford reentered the
tractor market in 1939 with the Ford N-series tractors. The Ford 8N, introduced in 1947,
became the most popular tractor of all time in North America. Production of the N line of
models ended in 1952.

The Ford NAA tractor was introduced as an entirely new model in 1953. It was a replacement
for the Ford N-Series tractors. Larger than the 8N, with a four-cylinder engine, and
streamlined styling.In 1986, Ford expanded its tractor business when it purchased the Sperry-
New Holland skid-steer loader and hay baler, hay tools and implement company from Sperry
Corporation and formed Ford-New Holland which bought out Versatile tractors in 1988. This
company was bought by Fiat in 1993 and the name changed from Ford New Holland to New
Holland. New Holland is now part of CNH Global.

2.ABOUT THE CURRENT PRODUCT RANGE

2.1 CURRENT RANGE OF PRODUCT

SUVs

 NEXT GEN EVEREST (previously known as Endeavour in India)

 ESCAPE
 PUMA

COMMERCIAL VEHICLE

 NEXT GEN RANGER

 TRANSIT CUSTOM
 TRANSIT VAN
 TRANSIT CAB-CHASIS
 TRANSIT BUS

PERFORMANCE RANGE

 NEXT GEN RANGER RAPTOR

  FIESTA ST
 MUSTANG

2.2 DETAILS OF EACH PRODUCT

1. NEXT GEN EVEREST

Engineered to excite, the Next-Gen Everest has been built for the adventurous, with
capability at its core. Inside, premium levels of craftsmanship have created a quiet and
refined sanctuary for up to seven occupants, while class-leading technology and safety make
every journey more memorable. “The Next-Gen Everest has been designed with one thing in
mind, and that’s our customers,” Doreen Mashinini, the general manager for marketing at
Ford South Africa, said.
“Everest owners are people who like adventure, recreation and being able to go out with
family and friends. Whether they’re conquering sand, rocky paths or city life, these customers
appreciate the utility, capability and spaciousness of an SUV, and this is where this Everest
excels by being tough on the outside, while providing a sanctuary on the inside matched to
the capabilities.
Two grades of the Next-Gen Everest are available at launch, headlined by a new flagship
grade: The Everest Platinum, which takes luxury and performance to new heights. It features
the new three-litre V6 turbodiesel engine and Ford’s advanced 10-speed automatic, linked to
a permanent.
Customers also have the choice of the Everest Sport which is powered by the proven two-litre
bi-turbo diesel engine, matched to the 10-speed auto. It uses an electronic shift-on-the-fly
part-time four-wheel drive system
It may be tough and rugged on the outside, but what customers want on the interior is a
different story. Inside, they want a sanctuary.
Designers put a lot of thought into the function and feel of the interior, taking inspiration
from modern homes and bringing in plush materials, premium finishes and ambient lighting
all in areas where customers can appreciate them the best.
Comfort and convenience are raised to even greater heights, with the inclusion of standard
integrated wireless charging, an electric parking brake and a svelte new leather trimmed e-
Shifter on the range-topping Everest Platinum. Befitting its flagship status, even the second-
row seats are heated to cope with brisk winter mornings.

Access to the third-row seats is much easier thanks to second-row seats that slide further
forward than before. Additionally, all occupants now have more places to store their things,
while charging devices is a breeze with power outlets in all three rows. This includes a
windscreen-mounted USB charging port, Type A and Type C USB ports in the front and
centre consoles, along with 12-volt sockets up front for the third-row occupants and in the
luggage compartment. The Platinum is further equipped with a 400-Watt inverter for
powering laptop computers and other devices.
In place of traditional analogue clusters, the Sport comes with an eight-inch digital instrument
cluster, with an engaging 12.4-inch version on the Platinum. Both models boast a large, high-
resolution portrait 12-inch touch-screen.
Additionally, there’s an embedded factory-fitted modem, allowing customers to connect to
their vehicle when linked with the FordPass™ App. FordPass enhances the ownership
experience with features like remote start, vehicle status check and health alerts, vehicle
locator and remote lock and unlock functions via your mobile device.
New and proven engine line-up
Everest customers told Ford that they wanted more power and torque for towing, carrying
heavy loads and off-roading, so the team selected Ford’s proven three-litre V6 turbodiesel
engine and refined it for the Everest, making it a perfect range-topping match for the
Platinum derivative with 184kW of power and a hefty 600Nm of torque.

While the new V6 spearheads the line-up, the Next-Gen Everest Sport is equipped with the
proven two-litre bi-turbo diesel engine that produces 154kW and 500Nm and is renowned for
its refinement and efficiency. Both engines are mated to Ford’s advanced 10-speed Select
Shift automatic transmission.

Engineered for adventure

The Everest Sport relies on a part-time electronic shift-on-the-fly four-wheel drive system,
which includes 2H, 4H and 4L modes for tricky off-road conditions. Sure-footed performance
is a hallmark of the Everest Platinum regardless of the terrain, with the adoption of an
advanced permanent four-wheel drive system that additionally features a default 4A (Auto)
mode that can be used on and off-road .With the twist of a dial or push of a button, customers
can engage the various drive modes: Normal, eco, tow/haul, slippery, mud and ruts, and sand.
It also comes with comprehensive range of advanced driver-assistance systems, to ensure
utmost safely and comfort, both on-road and off.

2. FORD ESCAPE

The Ford Escape is a compact crossover SUV sold by Ford since 2000 over four generations.
The first generation was jointly developed with Mazda which also created the Mazda
Tribute and Mercury Mariner as the twin model. Second generations of the Ford Escape,
Mercury Mariner, and Mazda Tribute were released in 2007 for the 2008 model year, but
mostly restricted to North America. In other markets, the first-generation models were either
replaced by updated first generation versions, or replaced by the Mazda CX-7 (2006)
and Ford Kuga (2008). Unlike the collaborative approach taken with the previous model, this
time the design and engineering were carried out solely by Ford. Since 2013, the model has
been paralleled with the Kuga sold outside North America, making them essentially identical.
A hybrid option was again available.

Ford released the third-generation model in 2012 for the 2013 model year. For the third-
generation, Ford unified the model with the Europe-designed Ford Kuga as per the "One
Ford" plan of having only one vehicle per segment internationally. It continues to the fourth-
generation in which the North American Escape is identical to the Kuga with a minor
cosmetic redesign. Hybrid and plug-in hybrid options are available for the fourth-generation
mod.
The fourth-generation Escape made its official debut on April 2, 2019, and went on sale in
the third quarter of 2019 as a 2020 model. It is built at the Louisville Assembly
Plant in Louisville, Kentucky. It also serves the third-generation Ford Kuga for countries
outside North America.

Compared to its predecessor, the model is claimed to be lighter by over 200 pounds (91 kg)
while occupying a footprint is larger due to a wider track and longer length. With its larger
size, the Escape provides more interior space for occupants by increasing headroom, shoulder
space, and hip room for both rows of seats. Combustion-powered models is equipped with
sliding second-row seats that allows a maximum of 37.5 cu ft (1,062 litres) of cargo space.

In China, the fourth generation Escape has a slightly restyled front fascia compared to the
North American version, and would be sold alongside the previous generation, which was
sold as the Ford Kuga.

3. FORD PUMA

the Ford Puma is a subcompact crossover SUV (B-segment) marketed by Ford since 2019. It
is considered an SUV equivalent of the seventh-generation Fiesta. The vehicle is only
available for the European and Australasian markets, with sales starting in Europe from 2019
and sales in Australasia from late 2020. In the European market, the Puma is positioned
above the EcoSport and below the Kuga (also called Escape outside Europe).

An electric version of the Puma will be launched in 2024. Ford first announced the Puma
crossover at its event Go Further in Amsterdam, along with the introduction of the third-
generation Kuga. The Puma nameplate was last used on the Puma sport compact. The vehicle
is based on the seventh-generation Fiesta platform (Ford Global B-car platform).

Production of the Puma started in Craiova, Romania (Ford Romania) in October 2019 along
with the EcoSport subcompact crossover and the EcoBoost 1.0 L Fox engine used in both
cars. Ford invested two hundred million euros, and employed 1,700 people on the project.

The Puma is offered with a mild hybrid 1.0 litre EcoBoost three-cylinder turbo gasoline
engine with a belt driven integrated starter, which uses energy from the braking system to
charge the forty-eight-volt lithium-ion battery pack in order to increase torque and lower
emissions. Power is rated at 153 bhp (155 PS), 114 kW, and 240 Nm. (180 lb ft) with an
additional 50 Nm. (37 lb ft) from the integrated starter system.

2.3 BRAND NAMES

Ford Automotive Segment

The automotive division manufactures and sells vehicles, parts, and accessories under the
Ford and Lincoln marques and the Motor craft brand.

Ford has had 12 different marques or brands under its ownership since its founding in 1903.
These include now defunct brands such as Edsel, Merkur, and Mercury, as well as active
brands such as Mazda, LandRover, Jaguar, and Volvo, that the company sold off over the
years.

As of 2017, Ford sells vehicles under only two marques, Ford and Lincoln. In 2016, the
company sold 6.65 million vehicles worldwide, the majority of which are Ford models.
Across the U.S., there are 10,608 Ford dealerships compared to just 214 Lincoln-only
dealerships; about 900 dealerships sell both Ford and Lincoln vehicles. Ford’s automotive
segment is its most lucrative, generating $9.4 billion of profit on $151.8 billion in revenue for
2016.

Ford Financial Services Segment

This division handles the financing and leasing of Ford and Lincoln vehicles to dealers,
government and corporate entities, and retail consumers. It operates primarily under the Ford
Motor Credit Company brand in the U.S., and FCE Bank in Europe. The financial services
segment generated $1.8 billion in net income in 2016.

Ford Smart Mobility Segment

This division researches and develops new vehicle technology, including connectivity,
electric and autonomous vehicles, fuel efficiency customer experience, and data analytics.
Ford combines this segment with its Central Treasury Operations division for the purposes of
financial reporting. In 2016, these two segments lost $867 million.

Other Companies Owned or Controlled by Ford

Ford also has several wholly owned subsidiaries and maintains controlling interest in several
consolidated joint ventures that support its global automotive division. Here are the largest
and most significant of these businesses.

Ford Lio Ho Motor Company (FLH)

Ford owns a 70% stake in this Taiwan-based company. FLH operates one plant that
assembles vehicles for both Ford and Mazda, and imports-built vehicles under the Ford
marque from Europe, Asia, and the U.S.

Ford Sollers Netherlands B.V.

This is a 50-50 joint venture between Ford and Sollers. The company manufactures cars and
light trucks in Russia, where it has exclusive Ford distribution rights.

Auto Alliance Co. Ltd.

This is a 50-50 joint venture with Mazda, based in Thailand. The single manufacturing plant
in Rayong produces both Ford and Mazda vehicles for both export and domestic sale. In
2016, Ford’s investment in Auto Alliance was valued at just under $500,000.

Changan Ford Automobile Company

Ford has a joint venture with Changan, one of the largest car manufacturers in China, and has
used it as its entry point into the Chinese market. The company manufactures both Ford and
Mazda vehicles at its five assembly plants. Ford’s investment is valued at $1.3 billion. An
offshoot, the Changan Ford Mazda Engine Company, produces engines for Ford and Mazda
passenger vehicles in China.

Ford Otomotiv Sanayi Anonim Sirketi

This is a joint venture with Koc Group of Turkey. The company is the sole distributor of Ford
vehicles in Turkey, and it also operates three assembly plants that produce the cargo trucks
for export and domestic sales.

Getrag Ford Transmissions

This partnership with Germany-based Getrag International operates plants in England,
Germany, France, and Slovakia where Ford produces manual transmissions for the Ford
Europe division. The company values its investment in Getrag at about $200 million.

JMC

Ford owns 32% of this publicly traded Chinese company. Its minority stake is second only to
the 41% interest owned by Jiangling Holdings. The company assembles several Ford vehicles
and transmissions at plants in Nanchang and Taiyuan.

PAST SALES DATA/ FUTURE PROJECTIONS

Much like 2020, 2021 has been a challenging year for the automotive industry. The global
automotive semiconductor shortage has impacted automakers’ production and 2022 forecast,
with brands halting or cutting their outputs to tackle the shortage. The number of worldwide
car sales in 2021 was projected to be about three million more than the 2020 sales volume, an
increase that still comes in far below pre-pandemic levels. As one of the global leaders in car
manufacturing, Ford reported a financial performance in line with the international market:
The Ford Motor Company's revenue came to over 136 billion U.S. dollars in 2021. This was
up from 127 billion U.S. dollars in 2020 but still 12 percent under pre-pandemic financial
recordings.
The bulk of Ford’s 2021 revenue was generated from the sales of their two main automobile
brands, Lincoln, and Ford. The manufacturer’s subsidiaries also include Ford Motor Credit
Company, which provide financing, leasing, and insurance to and through its dealers. Ford
Credit helped facilitate the purchase of new and used vehicles by retail customers, rental
companies, and government entities, along with making it possible for dealerships to improve
their

A mixed performance in a changing market

Early in 2022, the Ford Motor Company announced it would reduce the vehicle production of
a few key products, including the F-150 pickup and Mustang Mach-E electric crossover. The
F-Serie vehicles are among the leading cars and light trucks worldwide as of 2020 while the
Mustang Mach-E was the third best-selling plug-in electric car in the United States in 2021.
The United States is Ford’s main regional market, so the impact of production cuts on the
company’s vehicle inventory and annual output is expected to be observable.

Ford sold most of its vehicles at wholesale in the United States in 2021, yet the company’s
market share has been slowly dropping since 2017, down to under 13 percent in 2021. This
drop in popularity is paired with the rise of its main competitor Toyota—which topped the
U.S. sales market in 2021—as well as with the increasing demand for electric vehicles (EVs),
where Ford is competing with Volkswagen, General Motors, and the EV giant Tesla.
On October 26, 2021, the Ford Motor Company recorded a market capitalization of just under
64 billion U.S. dollars, ranking below fellow American brands Tesla and General Motors.
However, the company’s profitability improved in 2021, swiftly recovering from the net loss
sustained from the COVID-19 pandemic.

3.ABOUT THE MARKET

Global sales of automobiles are forecast to fall to just under 70 million units in 2021, down
from a peak of almost 80 million units in 2017. The auto industry's most important industry
segments include commercial vehicles and passenger cars. China is counted among the
largest automobile markets worldwide, both in terms of sales and production. Car sales in
China dipped for the first time in 2018; the market cratered in February 2020 but bounced
back shortly after. In 2021, the ranking of the world’s largest car brands was topped by
Toyota with a market share of around 10.5 percent. The Toyota brand is owned by Japan's
Toyota Motor Corporation, the world's largest motor vehicle manufacturer, surpassing the
2020 incumbent.

Considering growing environmental awareness and increasing efforts to connect vehicles,

automotive manufacturers are faced with a variety of new challenges. Market trends such as
the shift to lighter materials, as well as the trend towards electric and autonomous vehicles
are set to revolutionize the industry. Palo Alto-based Tesla Motors is currently at the
vanguard of the trend towards electrification, while peer Californian companies such as
Google and Apple may follow suit. Tesla delivered some 936,000 vehicles in 2021, meaning
that Volkswagen Group's sales tally is over nine times as much. Tesla is believed, to deliver.
Car sales worldwide have dipped between 2019 and 2020 as a result of the economic
downturn generated by the COVID-19 pandemic. 2021 sales recovered, despite remaining
below 2019 levels. By the end of 2021, China was the largest automobile market based on
new passenger car registrations, recording close to 20 million units sold. It was followed by
the United States and Europe. China was also the leading passenger car producing
country that same year.

4.ABOUT THE ENVIRONMENT

Political Factors Affecting Ford Motor Company’s Business

Ford’s business must address the political aspect as an external influence. Governmental
impact on firms’ remote or macro-environment is considered in this component of the
PESTEL/PESTLE analysis. The following are the political factors significantly affecting
Ford:

1. Governmental support for technological innovation (opportunity)

2. Increasing international trade agreements (opportunity)
3. Increasing governmental effort for infrastructure in developing countries
(opportunity)

Governments are increasingly supporting technological innovation to enhance economic

conditions. This situation provides opportunity for Ford to use governmental incentives for
innovation, environmentally friendly products and sustainability. Ford also has the
opportunity to expand its operations based on trade agreements, which make it easier for
companies to enter foreign markets. In addition, high-growth developing countries are
improving their infrastructure, including transportation infrastructure. This remote/macro-
environment condition contributes to the increasing demand for vehicles in these countries,
thereby giving Ford Motor Company the opportunity to grow internationally. This component
of the PESTEL/PESTLE analysis shows that the political external factors create significant
opportunities for Ford’s growth and expansion.

Economic Factors Important to Ford

Ford must always keep an eye on changing economic conditions. This component of the
PESTEL/PESTLE analysis identifies the influence of the economy on the firm’s remote or
macro-environment. The following are the economic external factors significant to Ford:

1. Growth of U.S. economy (opportunity)

2. High growth rate of developing markets (opportunity)
3. Strengthening U.S. dollar (threat)

Ford can grow based on the slow but notable growth of the U.S. economy, which is the
company’s biggest market. Ford also can grow in high-potential developing countries, where
the company still has limited presence. However, the strengthening U.S. dollar is an external
factor that reduces profit margins and the attractiveness of Ford’s products, considering that
many of the firm’s raw materials and automotive parts are produced in the United States.
Such remote/macro-environment condition indicates that Ford must improve business
efficiencies to maximize the opportunities in foreign markets identified in this component of
the PESTEL/PESTLE analysis.

Social/Sociocultural Factors Influencing Ford’s Environment

Ford Motor Company’s remote or macro-environment is subject to the influence of social

conditions. The impact of sociocultural trends is considered in this component of the
PESTEL/PESTLE analysis. The following are the social external factors most important to
Ford:

1. Increasing demand for hybrid and electric automobiles (opportunity)

2. Moderate attitude about customer service (opportunity)
3. Increasing wealth gap (opportunity & threat)

Ford can grow by providing products that address the increasing demand for hybrid and
electric automobiles. Ford also can improve its services, especially aftersales services to
attract more customers. However, the increasing wealth gap is a remote/macro-economic
environment condition that threatens Ford’s Lincoln automobiles, which are luxury products
with high prices. Based on this component of the PESTEL/PESTLE analysis, Ford’s
intensive growth strategies need to emphasize more on product innovation to satisfy changing
customer preferences and address the sociocultural external factors in its business.

Technological Factors in Ford’s Business

Technologies enable Ford to develop its potential and compete in the remote/macro-
environment. This component of the PESTEL/PESTLE analysis deals with the technological
changes and conditions that affect firms. The most significant technological external factors
in Ford’s business are as follows:

1. Rising use of mobile computing (opportunity)

2. Increasing use of online fulfilment services (opportunity)
3. Limited network of alternative fuel stations (threat)

The rising use of mobile computing is an external factor that creates opportunities for Ford
Motor Company to grow through mobile service support and mobile marketing. Also, the
firm can improve its performance through enhanced online fulfillment services. For example,
Ford parts can be delivered to customers through these fulfillment services. On the other
hand, the company’s potential growth in providing alternative-fuel vehicles may suffer
because of the limited alternative fuel stations. Thus, based on the technological component
of the PESTEL/PESTLE analysis, Ford needs to focus on service improvement and
technological enhancement to ensure competitiveness despite challenges in its remote or
macro-environment.

Ecological/Environmental Factors

Ecological concerns partly determine the conditions of Ford’s remote or macro-environment.

Issues regarding the natural environment are considered in this component of the
PESTEL/PESTLE analysis. The most significant ecological external factors in Ford’s
business are as follows:

1. Climate change (opportunity)

2. Low-carbon trend (opportunity)
 3. Declining oil reserves (opportunity)

Climate change is an external factor that creates opportunities for Ford to grow through
products that help in environmental conservation. The same effort could take advantage of
the low-carbon trend. Also, Ford can offer new products that use alternative fuels or
electricity to address the impact of the declining oil reserves on the remote or macro-
environment of auto firms. Thus, based on the ecological component of the
PESTEL/PESTLE analysis, Ford must emphasize product innovation to improve its business
performance.

Legal Factors

Ford’s business must satisfy legal requirements. The effects of regulations on the remote or
macro-environment are identified in this component of the PESTEL/PESTLE analysis. The
following are the legal external factors notable in Ford’s business:

1. Environmental protection regulation (opportunity)

2. Increasing safety regulations (opportunity)
3. Increasing intellectual property laws worldwide (opportunity).

5.NATURE OF DEMAND

5.1 BRAND AWARENESS

Ford is commonly described with a clever anagram: First on Race Day, but while it may
be cute, it’s also true. The Ford Motor Company has a storied racing history, dating back
to the 1800s, and that performance heritage is infused into every vehicle that rolls off the
assembly line today.

In the late 1800s––1896 to be exact––Ford founder Henry Ford developed his very first
car, the Quadricycle. The Quadricycle was not much of a car; mounted on four bicycle
tires and powered by a tiny 2-cylinder gas engine, this hand-built “horseless carriage”
sold for $200, which was considered very expensive at the time. Mr. Ford successfully
ran the Quadricycle at a top-end speed of 20 MPH, an unheard-of engineering feat which
began Ford’s foray into racing and performance.
Throughout the early 1900s, Henry Ford continued to design and engineer several gas-
powered vehicles, including the Ford 999, the Model K, and––famously––the Model T.
Also known as the Tin Lizzie, the iconic Ford Model T marked a turning point for Ford.
Debuted in 1908, Ford produced the affordable Model T until 1927, using a production
line assembly structure. In 1909, a Ford Model T won a 3600 km cross-country race, once
again contributing to Ford’s soon-to-be long list of performance victories.

Fast forward to 1950, and Ford is handed its first NASCAR victory, thanks to driver
Jimmy Florian. By 2013, Ford will win 1,000 NASCAR races, and as recently as 2018,
Ford has found itself returning to NASCAR’s winner’s circle. In addition to Ford’s
massive success in the NASCAR series, Ford has won 176 Formula One races.

This racing heritage promotes pride-of-ownership for past and current Ford owners
because they know this commitment to leading performance is part of the vehicle they
choose to drive. Even the 17-year-old newly licensed driver can appreciate that buying a
used Ford they just found for sale online will make them part of a winning brand family.
This pride and heritage date all the way back to Henry Ford’s quirky Quadricycle.

Ford truck buyers are both loyal and demanding. As a result, they keep Ford on its toes,
and Ford is rewarded year after year. The F-series remains one of America’s best-selling
truck models today, and Ford truck owners are quick to defend their truck when
challenged by others whose loyalty might be to other brands. There is no shortage of
articles touting Ford as ‘better than’ its nemesis, Chevrolet. These spirited debates fuel an
even deeper sense of loyalty among Ford Truck owners, with some taking personal
offense to any opinions that might differ.

In a whimsical article posted by CJ Pony Parts, the authors compare the Ford F-150 to the
Chevy Silverado. They point out that the F-150’s payload capacity is 1,000 pounds more
than that of the Silverado (equivalent to 1 moose or 100 bowling balls!) and offers a two-
inch larger truck bed. The independent parts seller is quick to acknowledge that both
trucks are great, but even though they carry parts for both, they just like the F-150 a little
better. This is a perfect example of the sometimes-fun rivalry that promotes such devotion
in Ford owners.
According to data from J.D. Power, Ford remains one of the most popular automakers in
the country. Not only is Ford at the top of the popularity list; it also enjoys a considerable
amount of brand loyalty when compared with other brands. J.D. Power estimates that
more than half of previous Ford owners bought another Ford. That staggering statistic has
stayed consistent for many years, dating back to even the Model T era, when over half of
Americans owned a Model T. It is a truly incredible story of loyalty and trust in a brand,
and an achievement only shared by a small list of other carmakers.

Shelby Cobra GT. F-150. Mustang. Just hearing these names conjures aspirational
feelings. Who would not want to own a souped-up Mustang Shelby GT or see that rough-
and-tumble F-150 waiting in the driveway every morning? Classic models are a
carmaker’s way of threading tradition and continuity throughout its line-up of vehicles.
Ford’s most recognizable brands achieve this effortlessly, and generations of Ford owners
take pride in being a part of the Ford story.

It’s pretty easy to see why the Ford brand plants the seed of loyalty so early in a driver’s
ownership experience. From the 16-year-old kid perusing used Ford vehicles for sale to
the performance fanatic that finally takes delivery of their very first Shelby GT Mustang,
Ford owners adopt their ferocious brand loyalty early and stick to it over the years,
demonstrating their solid commitment by choosing Ford repeatedly.

6. MARKET SEGMENTATION

The Ford Motor Company is using Differentiated Strategy in their organisations. This
approach is to target two or more segments by developing marketing mix for each
segment. The Ford Motor Company is designed to appease many diverse types of
consumers and to satisfy numerous different needs in the form of economy cars, sports
cars, luxury cars, station wagons, vans, trucks, and so on. And lately the latest vehicles
that the company produce, the Ford Fiesta, focuses on younger generation and in
particularly ladies.
Segmentation
Segmentation variables used by The Ford Motor Company are Geographic segmentation,
Demographic segmentation, Psychographic segmentation, and Behavioural segmentation.
The Ford Motor Company is largely segmented towards the United
Kingdom automobile market industry however it too segmented to others countries. The
newest model Ford Fiesta is using Demographic Variables which is age, gender, and
income specific. Behaviourist variables have also been used with the aim to look at the
benefit of fuel.

The mechanism of splitting down the entire set of consumers into different groups in
terms of their similar characteristics and as a potential buyer refers to a term called
market segmentation in the field of marketing. The renowned leading company Ford is in
full of activity mode in putting a step forward with their strategy of market segmentation.
The company has hired a competent and reliable person named as Jim Farley to take the
responsibilities of their team of marketing (corporate.ford.com). Moreover, the company
Ford Motor has gave out Fiestas in order to promote their new subcompact cars so that
they can create a hand of appreciation from the point of view of their customers.

The major current market segmentation which is done by Ford Motor is through
customers feedback and continuous surveys as the Motor company observed through their
surveys and consumer's buying patterns that more than or nearly half of them which is
fifty percent consumers have bought their truck named as F-10 and have listen to the
country music

7. REASON FOR SUCCESS/ FAILURE

Many American companies are successful at operating in other countries far away from
the US and have become true multinationals. However, there are some firms that have
failed miserably in their expansion in overseas markets. They failed for a variety of
reasons ranging from not respecting local culture and customs to trying to impose
American style work rules and policies that may not always be accepted by local workers.
A classic case in point the US retail giant Walmart (WMT). The behemoth is the largest
employer in the country and is well respected by the general population and the
government. In fact, in many states and cities and towns local politicians dream of luring
a store to their locations for the taxes and economic activities it would produce. However,
Walmart’s foray into Germany did not go well for many reasons that I discussed in
an article in 2013. After years of getting into trouble there the retailer pulled out many
years ago.

One of the recent US firms that could not conquer a foreign market is the auto maker
Ford(F). This past September Ford announced that it was ending its operations in the
emerging market of India after decades of trying to make it work.

The economy had been liberalised in 1991, the government was welcoming investors, and
the middle class was expected to fuel a consumption frenzy. Rising disposable income
would help foreign carmakers to a market share of as much as 10%, forecasters said.

It never happened.

Last week, Ford took a $2 billion hit to stop making cars in India, following compatriots
General Motors Co (GM. N) and Harley-Davidson Inc (HOG.N) in closing factories in
the country.

Among foreigners that remain, Japan’s Nissan Motor Co Ltd (7201.T) and even
Germany’s Volkswagen AG (VOWG_p.DE) – the world’s biggest automaker by sales –
each hold less than 1% of a car market once forecast to be the third-largest by 2020, after
China and the United States, with annual sales of 5 million.

Instead, sales have stagnated at about 3 million cars. The growth rate has slowed to 3.6%
in the last decade versus 12% a decade earlier.

Ford’s retreat marks the end of an Indian dream for U.S. carmakers. It also follows its exit
from Brazil announced in January, reflecting an industry pivot from emerging markets to
what is now widely seen as make-or-break investment in electric vehicles.

Some of the reasons for the failure of Ford in India include:

 Misjudging India’s potential.

 Not understanding the complexities of government policies in a huge country that
favor domestic procurement.
 Inability to understand the culture and adapt to produce small, cheap and fuel-efficient
cars. According to the Reuters article, 95% of cars sold there are price below
$20,000.
 High cost of ownership and maintenance and repair costs.
 Lower tax on smaller cars made it difficult for larger car makers like Ford to compete.
 Of all the foreign auto companies that invested in India over the past 25 years, only
South Korea auto maker Hyundai was successful due to it portfolio of small cars and
understands the needs of the Indian consumer.
 Trying to produce and sell sedans made for US and European markets at relatively
high prices will not work in an emerging country like India where consumers are price
conscious.