Case Study: How Ford Will Do In 2016?
How Ford Will Do in 2016?
The recently completed year 2015 was a mixed bag for the global automobile industry in terms of sales as well as profitability. The first three quarters of the year of the year caused the automakers to worry about the future returns from their recent and on-going investments in key markets like China, Asia Pacific, Europe and even the US itself. But results for the two reported months of the fourth quarter have revived the hopes that the New Year would turn out to be a great one. Sales of cars and light trucks in the U.S. likely set a record for 2015 at around 17.5 million vehicles.
S&P Capital IQ analyst, Efraim Levy is now expecting US SAAR to reach 17.6 million vehicles in 2016, a 1 % growth leading WSJ to ask why …show more content…
So if it clicks, it will mean a fortune for the bestsellers like GM and Ford. From profitability point of view also, US is the favourite for car companies. Thus, from the point of view of volume as well as profit, October and November vehicle sales numbers for US provide ample assurance, that 2016 is going to be much better than 2015.
But US is not the only market of importance for Ford. Ford is a global player. And despite a relatively smaller presence there, China is as important as US for Ford. Ford’s sales in the US market were 2.36 million units in the first 11 months of last year and might get very close to 2.6 million for the full year if we go by the monthly average. On the other hand, Ford is very likely to cross the 1 million unit mark in China for the full year 2015.
But the economic conditions in China are not as favourable as the US. The Chinese new-vehicle market slowed in 2015 after several years of strong growth. This market has to stop collapsing if 2016 is going to be a great year for the company on a global level. Ford’s growth in sales for the 11 month period through November was negative1.7 % over last year’s 1,007,425 units. But in the month of November only, it sold 106,283 units which were more than 10 % of the YTD total. This clearly indicates that the recent new launches and government incentives have been able to at least hold the declining sales for the moment. If Ford is …show more content…
By now, Ford of Europe has seen most of the factory closures, new products, changes to dealer efforts, and an organizational overhaul that were to happen according to the plan. On nearing the completion of the plan, Ford was to finally break even in 2015. That hasn’t happened. Tough economic conditions in Russia, where Ford has made a substantial investment, delayed the turnaround. But Ford looks all set to achieve that feat in 2016. It will also benefit from the setback that the European rival Volkswagen is facing due to its involvement in a massive emissions-cheating
The recently completed year 2015 was a mixed bag for the global automobile industry in terms of sales as well as profitability. The first three quarters of the year of the year caused the automakers to worry about the future returns from their recent and on-going investments in key markets like China, Asia Pacific, Europe and even the US itself. But results for the two reported months of the fourth quarter have revived the hopes that the New Year would turn out to be a great one. Sales of cars and light trucks in the U.S. likely set a record for 2015 at around 17.5 million vehicles.
S&P Capital IQ analyst, Efraim Levy is now expecting US SAAR to reach 17.6 million vehicles in 2016, a 1 % growth leading WSJ to ask why …show more content…
So if it clicks, it will mean a fortune for the bestsellers like GM and Ford. From profitability point of view also, US is the favourite for car companies. Thus, from the point of view of volume as well as profit, October and November vehicle sales numbers for US provide ample assurance, that 2016 is going to be much better than 2015.
But US is not the only market of importance for Ford. Ford is a global player. And despite a relatively smaller presence there, China is as important as US for Ford. Ford’s sales in the US market were 2.36 million units in the first 11 months of last year and might get very close to 2.6 million for the full year if we go by the monthly average. On the other hand, Ford is very likely to cross the 1 million unit mark in China for the full year 2015.
But the economic conditions in China are not as favourable as the US. The Chinese new-vehicle market slowed in 2015 after several years of strong growth. This market has to stop collapsing if 2016 is going to be a great year for the company on a global level. Ford’s growth in sales for the 11 month period through November was negative1.7 % over last year’s 1,007,425 units. But in the month of November only, it sold 106,283 units which were more than 10 % of the YTD total. This clearly indicates that the recent new launches and government incentives have been able to at least hold the declining sales for the moment. If Ford is …show more content…
By now, Ford of Europe has seen most of the factory closures, new products, changes to dealer efforts, and an organizational overhaul that were to happen according to the plan. On nearing the completion of the plan, Ford was to finally break even in 2015. That hasn’t happened. Tough economic conditions in Russia, where Ford has made a substantial investment, delayed the turnaround. But Ford looks all set to achieve that feat in 2016. It will also benefit from the setback that the European rival Volkswagen is facing due to its involvement in a massive emissions-cheating