Well, here’s a suggestion that’s out of left field. According to Bloomberg, if Ford’s current problem is its Ford, Mercury, and Lincoln lines, why not drop them?
Well, here’s a suggestion that’s out of left field. According to Bloomberg, if Ford’s current problem is its Ford, Mercury, and Lincoln lines, why not drop them?
The rational is compelling. With the exception of Jaguar, all of Ford’s Premiere Automotive Group (PAG) have at least broken even or even made a profit. Ford admits it is the North American and European markets, with their high costs and fierce competition and where it primarily sells its Ford, Mercury, and Lincoln products, that continue to put it in the red. The second largest American automaker has so far lost over $1 billion this year with little hope of improvement. “They’ve got an excellent portfolio, but they can’t seem to tie any of it together,” states analyst Michael Wynn-Williams of Trend Tracker. “Ford’s big problems are all to do with the downturn in their main US market.”
Ford originally created PAG in realization that it could not make a fair profit with its lower brands. But would exclusive focus on the luxury segment be enough to sustain the automaker? While BMW and Porsche have done well, the market is also highly competitive with many fallen players (e.g., Oldsmobile, Deusenberg, etc.) scattered on the roadside. Ford would have to learn quickly to adapt to the segment’s unique wants and needs, an area, despite PAG’s success, it’s still a bit player.
Via Business Times
5 comments so far
you know, you may have something here.
Perhaps to tune the idea up a bit, keep Ford and lose Licoln/Merc. To drop the Ford brand would be a mistake. How about Ford becomes the performance division, with the Mustang as the entry point. Then they could concentrate on quality and re-building some brand image.
September 20th, 2006 at 2:36 pm
I guess I don’t quite understand your premise. Are you saying Ford should solely consist of Land Rover, Volvo, Aston-Martin and Mazda?
Ford is too iconic of a brand to drop altogether. Here’s what they need to do, and I think they finally see the need to take quick action. Weaken the UAW’s stranglehold on their benefit costs, cut excess production capacity (which they’re doing), and re-vamp their disjointed and dated lineup.
September 20th, 2006 at 3:30 pm
I agree with the previous post, that the Ford brand is worth keeping. The Ford Truck in particular is extremely strong and valuable brand image with high loyalty. The F150 and SuperDuty outselling other many other import brands by themselves.
Mercury should be dropped.
How about giving the Mecury dealers a discounted Mazda franchise as part of the transition and increase the retail capabilities and breadth of the Mazda brand?
Lincoln could be rescued by focusing all the efforts on it and eliminating the mercury siblings on the CD & D platforms. Three derivatives from a platform is one too many.
September 21st, 2006 at 1:04 am
The Bloomberg writer is an idiot. What does he know about the auto business, turning around a company or Ford’s financial position? He’s a boneheaded writer making some lowly miserable salary. Does he have experience running a $200 billion company? Leading people? Turning around a failing business?
Ford’s global brand is one of the greatest brands on earth. In Central and South America Ford is a dominant player and profitable. In Asia, including China, ditto. In Europe, Ford is one of the largest and most profitable auto manufacturers. In America, Ford sells 1,000,000 full size pickups a year. More than all imports combined and multiplied by 1,000,000. ie, There aren’t any except for the low production, quality plagued full size Nissan pickup. And, Ford still sells plenty of cars. This is not a business that is going under. It is a business in crisis with need of transformation and leadership.
Bloomberg should fire that twit for writing such an assinine article.
September 21st, 2006 at 2:52 am
An interesting article…
Pakcar
September 21st, 2006 at 8:33 am
Leave a Comment
You must be logged in to post a comment.