The iconic Ford Motor Company is considered one of the pillars of the automotive industry. Its first vehicle, the Model T, introduced the concept of mass production and automobile affordability to the masses. Today, the market is full of domestic and foreign competitors, yet, Ford has struggled to remain competitive, even though it promotes itself as America’s best-selling brand. Its stock was recently downgraded, and recently, it announced its intentions to only sell sports utility vehicles, trucks, Mustangs and Focus, in other words, it will stop selling most of its passenger cars. Conversely, Toyota continues to lead the market in passenger car sales, while newcomer Tesla struggles to deliver on its backlog of 500,000 electric vehicle orders. Ford has strong brand equity, has automated production facilities and a large franchised dealer network across the globe. Yet, it is rapidly losing passenger car market share, its profits are eroding, and its new vision is confusing. Furthermore, the company is facing a significant threat from well capitalized new competitors entering from the tech industry. The company, on the other hand, has enjoyed significant success in mainland China, where the demand for American automobiles continuous to be strong. Yet, the company needs to assume a cost leadership position and attempt to use this strategy to increase market share. The contention in this paper is that an adequate approach for the company appears to be a combination of market penetration in the domestic front, market expansion in Asia and other parts of the globe, and a product development approach that ushers cost reductions.
Ford and the New Auto Industry
