Ford World Automobile Industry 2009 Which Companies

Ford World Automobile Industry 2009

Which companies are likely to be most successful over the next five years?

The companies likely to experience the greatest market success in the coming years are those that find a way to simultaneously innovate and, in the case of the Detroit Big 3 especially, find intuitive ways to reduce their capacity. Something that the case study published in the text by Grant (2009) makes quite clear is the notion that the American automotive market's crisis was essentially predicated by a series of assumptions that haven't evolved in several decades and by an oversaturated marketplace.

The text reports that, in fact, in the face of the growing financial crisis, "by the time President Obama took office in January 2009, U.S. auto sales were half of those a year previously. This fall in demand was unprecedented in the industry's history." (Grant, p. 534) The article goes on to surmise that the government bailout which followed the declarations of bankruptcy by Chrysler and General Motors in 2009 would prevent a sort of Darwinian occurrence in which the automotive industry shed both its archaic assumptions about the lack of alternatives to an internal combustion engine, about consumer interest in luxury and size over environmental efficiency and about the stimulation of demand. To this last point, Detroit continued to pump out cars at a rate tat the market could no longer bear, leading to the meltdown of 2009. As one evaluates the market share of GM and Chrysler in particular, their influence has waned dramatically from 1988 to 1996, a period in which the market share of Toyota and Honda have also risen dramatically. (Grant, p. 546)

Ford's market share has also declined significantly, though slightly less so than that of its counterparts among the Detroit Big 3. A natural impact of the opening of global borders to international trade, this is another effect which the auto manufacturers had not adjusted to accommodate. It is thus that GM and Chrysler stand to be the least successful of manufacturers at a time when the influences of Honda, Toyota and Volkswagen continue to grow.

What should Ford Motor Company do to improve its profitability over the next five years?

As of 2011, Ford Motor Company was a global automotive industry leader manufacturing and distributing vehicles in 200 markets across 6 continents according to CNN's (2011) Fortune Global 500 ranking of the world's most profitable firms. Recent years have brought extraordinary challenges for all American automobile companies. The fiscal year saw unprecedented economic turmoil that was triggered by the financial crisis. On the relative scale, CNN reports, Ford would demonstrate better resiliency than its peers. Accordingly, "Ford continues to bounce back from the auto industry crisis and was the only member of Detroit's Big 3 to not need government bailout money to do so. This past year, the automaker saw a $3.8 billion increase in net income from the previous year, to a whopping $6.6 billion." (CNN, p. 1)