From North America to China; A bittersweet journey



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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