Assume you are a senior manager at Ford. Your boss has just asked you this question: "That Mini is doing so well-why didn't we think of it?" How might you respond?
The shift to small cars in the automobile industry is a concern. Additionally, given the current trends in the rising cost of fuel demand for small cars will outstrip demand for big cars. The U.S. Automobile industry has been over the years characterized by a preference for big cars. This preference is highly attached to the American consumer culture. This situation makes a sudden switch by an automobile company to small cars somewhat like a wild-goose-chase (Kohler and Keller 710). Because motor vehicle production needs to be reflective of consumer needs, Ford could not have taken a sudden switch to small car manufacture.
The shift towards the new models for small cars comes as a consequence of the rising fuel prices that act as an inhibiting factor to big fuel guzzlers. The market response towards small cars has not sent sufficiently strong signals for a sudden change in production of small cars. There is a change in demand for small cars but, not sufficient to argument a complete overhaul of the production lineup. In the market, demand for big cars still exists among the die-hard fans for big cars and the Americans with big families. Additionally the tradition for small vehicles is foreign and, therefore, not likely to take a swiping wave upon demand for big cars. The existing situation justifies Ford's failure to take on the production of big vehicles immediately.
It is however, appreciable that there is a need to consider taking up production of small vehicles for the emerging market. This will give the company an edge against facing off with the competition from foreign companies (Kohler and Keller 725). Such considerations will also allow the company to maintain local American loyalty to their brand and venture into the foreign market with an upper hand. Before considering a shift to production of a new range of small cars, Ford needs to incorporate the consideration for the slow but steady shift to small cars. This will factor in the need to maintain supply of big vehicles and move in the same footing with the market. Considering that the demand for a small vehicle in the market comes from the rising cost of fuel, caution should be taken against fully changing the model of the vehicle. This caution is necessary since the prices of fuel may drop and influence demand for big vehicles in the market.
An additional caution is necessary given the fact that the consumer preference for a small vehicle is not based on the design of the vehicle but for their fuel efficiency aspect. With this in mind Ford should focus more to orientation of their cars to match up with the rising cost of fuel. In this sense, the vehicles can be developed to allow the user the luxury of owning a big car that is fuel efficient. Note that, the demand for a small vehicle is highly observable among the young generation, who think the small car to suit their small life family lifestyle. Although the young people consider the small cars suitable in their current situation, time will come that they will desire a bigger car. Therefore, Ford needs to develop a car that has a futuristic perspective in order to stay afloat with the observed need for fuel efficient and ideal automobile.
This consideration requires an evaluation of the current cars produced in the plant so as to achieve a much needed fuel efficiency and not just the size of the car. In their consideration, additional factors such American consumer tradition and the likely future trends in the Automobile industry is needful.
What factor or factors might cause a reversal in buying patterns back toward bigger cars and trucks?
The shift observed in demand for cars in the recent years reflects more of a preference towards a fuel efficient car as opposed to the size of the car. The preference for small cars such as the Mini Cooper, The Rio from Kia, Versa from Nissan, Chevy's Aveo, among others is because of their power to…