Since the past year Ford
Motor Company’s stock has ranged in between $14 to $18 per share. Today, on
29th April Ford Motor
Company’s 2014 stock is worth
$16.09 per share and has gained by 0.78% since yesterday. Located in Dearborn,
Michigan United States, the name Ford echoes throughout the world as their
products are spread all over the globe. The vehicle manufacturer is known for
producing extremely strong, reliable and secure cars equipped with heavy
engines. The company has had to deal with extreme competition as of late but
the most basic and fundamental reason for its “overall” low stock price is as follows.
The only downside to the company and its failure to increase
its stock price is due to the fact
that fossil fuels are non-renewable resources and they have been running out as
of late. Since the company itself has maintained or rather unwillingly been
stuck with the reputation of “gas guzzlers”
because their cars are equipped with heavy engines, even though this does
enhance their vehicle’s performance, it is still at the same time not
economical and proves to be a burden on the consumer’s budget. The
aforementioned combined with the fact that in present times, the world is
moving towards more environmentally responsible products and therefore, Ford Motor Company have been dealt with
a heavy blow. The corporation may have to change their traditional methods of
production and shift its gears towards a new method which satisfies consumer
demands.
In 2014, Ford has yet again experienced disappointing
results in the first quarter. Compared to last year, Ford Motor Company’s net
profits are down by 39% (more on this at www.bidnessetc.com) and this is even worse than the expected estimate
according to various analysts. However, Ford may still be subject to a silver
lining in all of this as they have maximized their revenues and are a force to
be reckoned with in the Asia-Pacific region most notably China. There is
immense potential in this region as it may even lead to reduction in the
company’s reliance on North America as almost all of their profit is earned
from there and this dependence even though is fruitful but is a huge risk at
the same time. Ford Motor Company’s
wholesale units sold in China have gone from 30,000 to 110,000 in between the
time-period ranging from 2012 to 2014 and this greatly benefits its stock price. A welcoming sign for the
potential shareholder indeed. Whether this evidently proves to be Ford’s silver
lining remains to be seen, for now the fact of the matter for sure is that Ford
(as long as they have been in the vehicle manufacturing industry and the
experience that they have) are not realizing their fullest potential as it
seems evident over the past years.
There is still a concern for Ford even in the Asia-Pacific
region as their main rival as well as competitor in the region is General
Motors (GM). The concern lays over the factors, such that GM’s product
portfolio is almost the same as Ford’s and therefore due to the nature of their
non-differentiated products, the companies may fall subject to a price war and
this does not benefit either of the company’s stock. The company are vary of this fact (as their journey in China
has only started) and have already started to increase their productive
capacity, even introducing newer models to gain as well as eat into GM’s market
share. Henceforth, Ford Motor Company
may still hold on to the one hundred and eleven years grandeur that once was
and yet as it seems may continue to be so.
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