Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Friday, November 17, 2006

While Ford's Sales Double In China, Will It Be Around To Enjoy It

Stocks: (F)(GM)(TM)(HMC)

Ford is boasting that it will double sales in China, over and over again. But, the No. 2 car company in the US only sells about 100,000 cars in the big Asian nation. Rival GM will sell over 850,000 cars there this year.

Ford is still being bloodied in it home market, so the talk of China gains is whistling past the graveyard. Over the last decade, Ford's US share has dropped from 25.8% to 18.3%. During the same timeframe, Toyota's market share has rise from 13.3% from 7.4%. Honda's has risen from 5.4% to 8.6%.

Ford has actually predicted its US share will drop as low as 14%. Its $5 billion in annual cost cuts may bring North American operations to the point where they are cashflow positive, but that is a long way off. And, there is no guarantee that the company's forecast of a 14% bottom is accurate. Ford could hardly have predicted its current sales when it had almost 26% of its home market.

Ford management needs to shut-up about China. The company not be around to enjoy it progress there.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

Powered by Blogger