Ford Motor Company Essay Example | Topics and Well Written Essays - 1250 words

Ford Motor Company - Essay Example As can be see in Chart 1 which compares the aggregate Industry Sales in number of units sold to the individual major players, the entire industry suffered and each player reflected a steep decline in the number of automobiles sold until 2009. Auto Unit Sold in ‘000s Years Chart 1. Aggregate Industry Sales vs. Individual Players USA Auto Manufacturing Industry In 2009, GM (Isidore, C. 2009) and Chrysler (Epiq 2009) applied for bankruptcy. Toyota (Toyota 2012) also lost substantially. The performance of Ford was therefore not comparable to these competitors because, unlike the other players, Ford profited in 2009. And it was because Ford retrenched and operated after closing three (3) plants, had lower cost and expenses, and at profitable level to match the demand. Thus, Chart 1 was meant to show how Ford performed along with the industry performance and the industry players’ performance in terms of Units Sold. What cannot be seen in any chart is what Ford did to earn star ting 2009 up to the present. It had nothing to do with competitive designs or pricing strategies, although such strategies helped. But GM also adjusted the design to shift to smaller vehicles. After the recession, individual auto manufacturers like General Motors, Chrysler, Nissan, and Ford realized increases in sales by 2010 and 2011 annual reports. Details of the units sold appearing in Table A show that in terms of market share growth, these auto manufacturers performed as follows: 2010 2011 Market Share (MS) Growth MS2010 Less MS2009 Market Share (MS) Growth MS2011 Less MS2010 Cumulative Growth 2011 Base Year= 2009 GM 19.14% ( 0.78% ) 19.66% + 0.52% ( 0.26% ) Chrysler 9.34% + 0.43% 10.69% + 1.35% +1.78% Nissan 7.86% + 0.46% 8.19% + 0.33% +0.79% Ford 16.49% +0.57% 16.58% + 0.09 % + 0.66% Ford Motor Company has the 2nd biggest market share next to General Motors as of the 2011 yearend. The lead of GM over Ford was reduced during the downturn and recovery years. As a matter of fact , Hitt, Ireland and Hoskisson (2012, p.138) shows the market share of GM to be 19.2 in 2010 and 19.9% in 2011. But the NADA (2012) statistics show a lower market share for GM equivalent to 19.14% in 2010 and 19.66% in 2011, whereas the data of Ford Motor Company in the same years were fairly accurate at 16% in 2010 and 17% in 2011 due to the round-off. Thus, Ford realized both growth in the Net Income and growth in its market share of the US auto sales. Details of market shares and number of vehicles sold each year in the USA came from the National Automotive Dealers Association of USA. See Table A below and in the following page. Table A. New-Vehicle Sales & Market Share by Manufacturer [Source: NADA 2012. New-Vehicle Sales & Market Share by Manufacturer. National Automotive Dealers Association, p.9. Viewed October 24, 2012 @ http://www.nada.org/NR/rdonlyres/C1C58F5A-BE0E-4E1A-9B56-1C3025B5B452/0/NADADATA2012Final.pdf ] How Ford Motor Company actually profited in 2009 even while sa les declined for the entire industry and for individual players can be explained by the initiative of its management to retrench and operate at a more profitable level, seeing the industry declining demand for automobiles. Ford Motor Company retrenched by closing three plants and operating with lower capacity. This resulted in the reduced Total Assets in 2009 and 2010. The lower cost and expenses by 2009 made it possible for the company to generate profits starting 2009. The sales growth