Another opportunity for Ford

Automotive Industries, Nov, 2001 by Ray Windecker

In 1980, Ford Motor Co.'s 20.4 percent U.S. market share was within one-tenth of a point of the modern low--yet there were opportunities. Actions through the 1980s, first from the well-played Taurus/Sable program and then a continuation of new products and moderately aggressive styling, brought 1990 in at 23.8 percent

These programs provided momentum through 1993, pushing the share above 25 percent Trucks and quality gains brought a modern high of 25.5 percent in 1995; then, beset by an increasing flow of imports and often-disadvantageous currencies, the share went down a point by 1998.

Reputational and quality concerns surfaced in 1999, became news-media fodder in 2000 and amplified economic problems that were tormenting the entire U.S.-headquartered industry. Consequently, Ford's share during the first eight months of 2001 fell to 22.7 percent. Withdrawing from heavier trucks and compact cars after 1995 cost 2.0 points while an increase in imported European models contributed one point. These actions helped the balance sheet, but harmed share.

Ford is still 2.3 points ahead of its 1980 low however, thanks to the 5.1 percent gain it carved out for itself between 1980 and 1995. This contrasts sharply with the steady 20-year decline of share at GM (see Al, Sept. 2001, pg. 12).

The question is, can Ford hold share or make moderate gains? Major gains are virtually negated by the "Rule of 100." Empirically, 100 percent is all there is. The combined new players and nameplates must mathematically, on long-term, gain share while the combined existing players must lose share. Some will be roughed up more and some will gain more than others. But the rule of 100 is unbreakable.

The future of Ford's U.S. market share now rests in the hands of former Jaguar rescuers Nick Scheele and manufacturing veteran Jim Padilla. Their challenge is twofold: generate profits to satisfy Wall Street and boost market share to quiet the business press. As in the 1980s, those challenges are also opportunities, although profitability could prove elusive in the wake of the recent national tragedy.

Ford Motor Co. U.S. Market Share

Combined Cars and Trucks

          PERCENT

1980       20.4
1990       23.8
1995       25.5
1996       25.1
1997       25.0
1998       24.5
1999       23.9
2000       23.7
2001 (*)   22.7

(*)Eight months

Source: American Autodatum

Note: Table made from line graph