Business Industry Analysis Ford Motor Co. Industry analysis Prepared By

1. overview Primary SIC 3711

“The assembly line became the century’s characteristic production mode, eventually applied to everything from phonographs to hamburgers. The vast quantities of war material turned out on those assembly lines were crucial to the Allied victory in World War II. High wage, low skilled factory jobs pioneered by Ford accelerated both immigration from overseas and the movement of Americans from the farms to the cities. The same jobs also accelerated the movement of the same people into an ever expanding middle class. In a dramatic demonstration of the law of unintended consequences, the creation of huge numbers of low skilled workers gave rise in the 1930s to industrial unionism as a potent social and political force. The Model T spawned mass automobility, altering our living patterns, our leisure activities, our landscape,even our atmosphere” [Hen14].

“Ford Motor is engaged in producing automobiles. Co. and its subsidiaries also engage in other businesses, including financing vehicles. Co.'s business is divided in two sectors: Automotive and Financial Services. Within these sectors, Co.'s business is divided into reportable segments. Reportable segments in the Automotive sector include: Ford North America, which primarily includes the sale of Ford- and Lincoln-brand vehicles, service parts, and accessories in North America (the U.S., Canada, and Mexico); Ford South America, which primarily includes the sale of Ford-brand vehicles, service parts, and accessories in South America; Ford Europe, which primarily includes the sale of Ford-brand vehicles, components, service parts, and accessories in Europe, Turkey, and ⁱRussia; and Ford Asia Pacific Africa, which primarily includes the sale of Ford-brand vehicles, service parts, and accessories in the Asia Pacific region and South Africa. Substantially all of Co.'s vehicles, parts, and accessories are marketed through retail dealers in North America, and through distributors and dealers outside of North America. In addition to the products Co. sells to its dealerships for retail sale, Co. also sells vehicles to its dealerships for sale to fleet customers, including commercial fleet customers, daily rental car companies, and governments. Co. also sells parts and accessories, primarily to its dealerships (which in turn sell these products to retail customers) and to authorized parts distributors (which in turn primarily sell these products to retailers)” [Mer1].

1. History

“Incorporated in Delaware on July 9, 1919, and subsequently acquired all the assets of Ford Motor Company, organized in Michigan, June 16, 1903. “The predecessor company was capitalized for $100,000 of which only $28,000 in cash was actually paid in. There were 12 stockholders, including Henry Ford who held a 25 1/2% interest. In 1906, Henry Ford increased his holdings to 51% and shortly thereafter to 58 1/2%. In 1919, Ford family interests purchased the outstanding minority interest of 41 1/2%” [Mer1].

2. Factors affecting growth

“The automobile industry crisis of 2008–2010 was a part of a global financial downturn. The crisis affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry. The downturn also affected Canada by virtue of the Automotive Products Trade Agreement. The automobile industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2003-2008 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy. The popularity and relatively high profit margins of these vehicles had encouraged the American "Big Three" automakers, General Motors, Ford, and Chrysler to make them their primary focus. With fewer fuel-efficient models to offer to consumers, sales began to slide. By 2008, the situation had turned critical as the credit crunch placed pressure on the prices of raw materials”[Fac14].

3. Regulations

4. Leading businesses in the industry

Ford Motor Company is headquartered in Dearborn Michigan; the company enjoys a 16% market share in the industry. Some of Ford Motor Co.’s key competitors are General Motors, Toyota Motors, Hyundai-Kia, Honda Motors, and Nissan Motors. Ford Motor Company remains a driving force in the industry as Euler Hermes reports “The Big Three (GM, Ford, and Chrysler) continue to be major players in the U.S. automotive marketplace, accounting for a combined 45.5% of YTD deliveries through September (2013). Their combined market share is up 51 basis points due to strong performance by Ford, whose revamped line up and continued success of the F-Series truck platform is driving improvement.”(Euler Hermes)