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Ford
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| Subsidiary |
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| Introduction | Ford,
the current no. 2 car maker in the world, is forecasted to overtake GM as
number 1 in a few years time as a result of the recent acquisition of Volvo
and the expansion of Jaguar. Compare with GM, the global strategy and the
product `s competitiveness of Ford are both superior. Ford does not rely
too much on badge engineering (just the Mercury brand). Instead, it bet
on the "world car" strategy which was pioneered by Mondeo, Cougar and then
Focus. However, the disappointing sales of Mondeo in the US market may force
the management to rethink - at least some more individuality should be built
in exclusively for the market targeted.
The simplicity of its model line up could be surprising. Unlike GM and Chrysler, Ford concentrates on a few models and push them to the best sellers, most notably is Taurus. This is a tradition since Henry Ford created the Model T. Nevertheless, the Mercury branch remains to be the re-styled and re-badged Ford, therefore its existence is quite questionable. Maybe the company should build more real character into Mercury `s cars. Ford `s global strategy is going well in the past few years. Since 1987, it acquired big names like Jaguar, Aston Martin and Volvo. Together with Lincoln, they formed the "Premier Automotive Group" (PAG) which will shake up the luxurious car market soon. More details are in Ford (Europe) section. Besides, Ford `s long term partner in Japan, Mazda, has resumed profitability under the vast cost reduction by CEO Jim Miller, who was appointed by Ford in 1996 as a result of increasing share in Mazda from 25% to 33.3%. Ford also has minority share in Korean car maker Kia, which is now a subsidiary of Hyundai. The link may bring the largest Korean car maker to the Ford alliance. Ford `s European operation and Australia arm have their own production and car development program. The former is one of the Europe `s big 6 while the latter is struggling to retain its R&D independence. |
| Sales figure | 1997 production figures : North America (US, Canada, Mexico) : 4.8 million cars and trucks Ford Europe : 1.9 million cars and trucks South America : 370,000 cars and trucks Ford Australia : 90,000 cars, mostly Falcon and its variants. Total global production : 6.94 million cars and trucks |
| Location | Headquarters : |
| Brief History | Ford is renowned for being the driving
force of industrial revolution by introducing mass production. It was founded
by Henry Ford in 1903 in Detroit. Two years later, the production rate rose
to 1,700 cars a year, mostly was the early Model A. He continued the alphabetic
naming rule. By 1908, he went through 19 letters and had gone to Model S.
However, the real revolution was the next one, Model T.
Continuing improvement eventually raised the production rate to one car every 10 seconds ! As a result, cost reduced and Ford reduced the price, which boost sales and reduced production cost again. At last the Model T was sold at just $260, which fulfilled the dream of the American public. Cars became a transportation for every ordinary American. Henry Ford had another contribution to the industrial revolution : he set a minimum wage of $5 per day, which is more than double the existing minimum rate. He explained that was not only a social revolution but also helped its workers to buy more Model T ! He said "If you cut wages, you just cut the number of your customers" After the 19 years of production, Model T set a production record of 15,007,033 units, which was not broken until Volkswagen Beetle. In 1922, the world no. 1 car maker bought Lincoln as its luxurious cars division. Undoubtedly, Henry Ford was a great production expert, but he seemed to be not so great in engineering and marketing. There was a joke about the lack of choice of Model T `s colour : "You can choose whatever colour, as long as it is black." Ford saw the production simplicity came first, not the customer `s requirements. His another problem was relying too much a single model. When Model T got old, he faced strong challenge from the various attractive models from General Motors. For example, the Chevrolet has 6-cylinder engine. By 1927, all Ford plants closed for six months to retool for a new car, Model A (the second time to use this name). It was an improved version of Model T, still simple and reliable, but larger and more modern. In response to GM, the first production V8 was installed to Model A in 1932. However, Model A did not fight off the competition from GM. The single model policy no longer worked, so was the Henry Ford legend. The company was sinking until well after WWII, losing its top spot to GM, then the second position to Chrsyler .... The president position shifted to Henry s son, Edsel, but after his death in 1943, Henry came back shortly until his grandson, Henry Ford II, succeeded him in 1945. Henry died in 1947. After WWII, the loss-making company started a reform which led to a wider model range. In 1949 it climbed back to the second position. It sold 807,000 cars that year, the best since Model A.
Being the pioneer of pony cars, Ford Mustang enjoyed huge sales success - 2 million cars were sold in its first 4 years ! This means it became the most popular sport-purpose car of all time. In the 70 `s, all US car makers were threatened by the oil crisis, smog control, hence the invasion of Japanese small cars. Ford coped well by stopping making the old-tech big cars and poured billions R&D budget into new technology research. The collaboration with Mazda also helped developing its small cars, Escort. The tradition of making conservative cars disappeared with the launch of the Taurus in 1985, a modern car even in the eyes of European and Japanese. The second generation Taurus, in 1996, was even complained for too radical in styling. Then came the "New Edge" design in Cougar and various models of Ford Europe. Obviously, Ford is re-establishing its image as a young, modern and dynamic brand. |
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