|Name||Ford Motor Company|
|Industries served||Automotive and Financial Services|
|Geographic areas served||Worldwide (62 countries)|
|Headquarters||Dearborn, Michigan, U.S.|
|Current CEO||Mark Fields|
|Revenue||US$149.558 billion (2015) 3.8% increase over US$144.077 billion (2014)|
|Profit||US$7.373 billion (2015) 598% increase over US$1.231 billion (2014)|
|Main Competitors||Fiat Chrysler Automobiles, General Motors Company, Honda Motor Company, Hyundai-Kia Automotive Group, PSA Peugeot Citroën, Renault-Nissan B.V., Suzuki Motor Corporation, Toyota Motor Corporation, Volkswagen AG Group and many other automotive companies.|
Ford Motor Company business overview from the company’s financial report:
“We are a global automotive industry leader based in Dearborn, Michigan. We manufacture or distribute automobiles across six continents.
In 2015, we sold approximately 6,635,000 vehicles at wholesale throughout the world. Substantially, all of our vehicles, parts and accessories are sold through distributors and dealers, the substantial majority of which are independently owned. We do not depend on any single customer or a few customers to the extent that the loss of such customers would have a material adverse effect on our business.
In addition to the products we sell to our dealerships for retail sale, we also sell vehicles to our dealerships for sale to fleet customers, including commercial fleet customers, daily rental car companies, and governments.
We also sell parts and accessories, primarily to our dealerships (which in turn sell these products to retail customers) and to authorized parts distributors (which in turn primarily sell these products to retailers). We also offer extended service contracts.”
1. Geographically diversified revenue streams.
The majority (65%) of Ford’s revenue comes from the North American region. The key market in that segment is the U.S., where the company sold 2.677 million vehicles units, earning US$78 billion or 55.5% of its total automotive revenue in 2015. Most automotive companies rely on their home markets to generate the majority of their sales, including Ford.
|Country||Vehicles sold (000’s)||% share of total||Revenue (US$ billions)||% share of total|
Source: Ford’s financial report
However outside of its home market, Ford has a more diversified revenue stream than its rivals. Overall, Ford receives 76.9% of its revenue from 5 different markets. In comparison, General Motors earns 83.2% of its revenue from 5 different markets, while Toyota derives 77.1% of its revenue from only 3 different markets.
Ford’s competitors therefore rely on fewer markets to generate the bulk of their revenues, making them more susceptible than Ford to political, economic, social and demographic changes in those markets.
Figure 2. Ford’s revenue breakdown by country
Source: Ford’s financial report
Figure 3. Toyota Motor Corporation’s and General Motors’ revenue breakdown by country
Source: The respective companies’ financial reports
2. Pickup trucks product line.
Ford has produced the best-selling pickup truck in the U.S. market for a record 39 years in a row, via its F-Series pickup trucks (a lifestyle/light commercial vehicle with an enclosed cab and an open rear cargo area with low sides and tailgates). The company heavily invests in its F-Series pickups, owning more than 100 patents related to pickups, providing the best quality vehicles and offering the most innovative technologies to assist drivers. This allowed the company to outsell its nearest competitors by 100,000 vehicles for the last few years.
|Best-Selling Truck||2015||2014||% change|
Source: Good Car Bad Car
Ford’s success with its larger vehicles over a long period of time has allowed the company to achieve economies of scale in production, making its larger range of vehicles the most profitable in their range.