Enviro Scan Anyalysis
COMPANY PROFILE
Ford Motor Company
REFERENCE CODE: 4E3AD1B7-04B2-4E87-BB09-7DC916B9230F
PUBLICATION DATE: 16 Jul 2021
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Ford Motor Company
TABLE OF CONTENTS
Ford Motor Company
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TABLE OF CONTENTS
Company Overview ………………………………………………………………………………………….. 3
Key Facts …………………………………………………………………………………………………………. 3
SWOT Analysis ………………………………………………………………………………………………… 4
Ford Motor Company
Company Overview
Ford Motor Company
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Company Overview
COMPANY OVERVIEW
Ford Motor Company (Ford or ‘the company’) is an automotive manufacturers in the world. Its products
include cars, crossovers and sport utility vehicles (SUVS), trucks and vans, hybrids and EVS, commercial
trucks, fleet vehicles, utility vehicles, vehicle accessories, and after sales vehicle parts and other related
products. The company manufactures and distributes automobiles across six continents. It also provides
financial services through Ford Motor Credit. The company’s major automotive vehicle brands include
Ford and Lincoln. The company primarily operates in North America, Europe, Asia Pacific, South
America, and the Middle East and Africa. The company is headquartered in Dearborn, Michigan, the US.
The company reported revenues of (US Dollars) US$127,144 million for the fiscal year ended December
2020 (FY2020), a decrease of 18.4% over FY2019. The operating loss of the company was US$4,409
million in FY2020, compared to an operating profit of US$519 million in FY2019. The net loss of the
company was US$1,279 million in FY2020, compared to a net profit of US$47 million in FY2019.
The company reported revenues of US$36,228 million for the first quarter ended March 2021, an
increase of 0.8% over the previous quarter.
Key Facts
KEY FACTS
Head Office Ford Motor Company
1 American Rd
DEARBORN
Michigan
DEARBORN
Michigan
USA
Phone 1 313 3223000
Fax 1 302 6555049
Web Address www.ford.com
Revenue / turnover (USD Mn) 127,144.0
Financial Year End December
Employees 186,000
New York Stock Exchange Ticker F
Ford Motor Company
SWOT Analysis
Ford Motor Company
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SWOT Analysis
SWOT ANALYSIS
Ford Motor Company (Ford or ‘the company’) is one of the largest automotive manufacturers in the world.
Strong market share, robust portfolio of automotive products, and strong focus on research and
development activities are its key strengths; even as product recalls is an area of concern. Growth
electronic vehicles; strategic initiatives and new product launches provide ample growth opportunities for
the company. However, foreign currency fluctuations, intense competition and stringent environmental
regulations may affect its future growth operations.
Strength
Significant research and development capabilities
Strong market share
Robust portfolio of automotive products
Weakness
Product recalls could impact reputation in the market
Opportunity
New product launches
New contracts to expand business operations
Growth Electronic vehicles
Threat
Stringent environmental regulations
Fluctuations in foreign currency
Intense competition
Strength
Significant research and development capabilities
Ford has strong engineering, research and development (R&D) capability. The R&D efforts are directed
at improving the performance (including fuel efficiency), safety, customer satisfaction, and developing
new products. The company operates use nine regional engineering, research, and development centers.
The R&D costs incurred in FY2019 was US$7.4 billion. Also, the company currently has numerous active
patents and pending patent applications globally, with an average age for patents in its active patent
portfolio of just over five years. Due to the strong R&D efforts, the company was able to develop and
launch a number of new vehicles. For instance, In November 2020, Ford announced to introduce E-
Transit, an all-electric cargo van.
Strong market share
Ford is one of the leading automotive manufacturers in the world. The company has a strong market
presence across the globe, with a global market share of 6% in FY2019. Ford primarily operates in North
America, Europe, Asia Pacific, South America, and the Middle East and Africa. Also, the company
occupied a market share of 14.6% in the Canadian automotive market. Ford was Canada’s leading
automaker in terms of volumes sold in 2019. Ford maintained an overall strong position in the North
American automotive market. In addition, the company has robust market share of 6.8% in Europe, with
13% and 10.1%, in the UK and Turkey, respectively. In the South American market, Ford has been
Ford Motor Company
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consistently maintaining a strong market share of more than 8.1% in Brazil, even though of a gradual
decrease in sales. The company’s market share in Argentina has decreased to 11.4% in FY2019.
Robust portfolio of automotive products
Ford is engaged in designing, manufacturing and selling cars, utilities vehicles and trucks. Through its
automotive business, the company produces a range of vehicles, including cars for the small, medium,
large and premium segments; trucks; buses/vans (including minivans); full-size pickups; sport utility
vehicles (SUV); and vehicles for the medium/heavy segments. Ford produces vehicles under the Ford
and Lincoln brands. In FY2019, the company sold approximately 5,386,000 vehicles (wholesale)
throughout the world. The company also provides a wide range of after-sale vehicle services and
products, including maintenance and repairs, vehicle accessories and parts, and extended service
contracts. Thus, robust portfolio of automotive products helps the company to meet the evolving needs of
its customers which in turn provides significant competitive advantage.
Weakness
Product recalls could impact reputation in the market
In the recent past, string of product recalls have hit Ford’s quality image. Ford has recalled some of its
most popular models due to manufacturing and design problems. In June 2020, the company recalled
around 2.5 million vehicles along with its best-selling F-150 pickup in North America. These vehicles are
recalled for its potentially dangerous brake issue and faulty door latches. In June 2019, Ford issued four
safety recalls in North America, which includes one covering more than 1.2 million SUVs due to discovery
of a defect that puts drivers at risk of crashing.
Opportunity
New product launches
The company’s focuses on continuous product innovations and introductions could help it to enjoy
competitive advantage over its peers and build brand equity, besides driving its overall sales growth. In
December 2020, Ford Motor’s micromobility unit, Spin announced the launch of its e-scooter in Basildon,
Essex. In September, Ford India announced the launch of its doorstep service facility. In June 2020, Ford
Motor along with Sime Darby Auto ConneXion (SDAC) launched the new Ford Ranger FX4 in Malaysia.
In the same month, Ford Motor announced to introduce new Trail and Active versions for the Transit and
Tourneo ranges. In May 2020, Ford India launched Dial-A-Ford service to bring the company dealership
closer to the customer.
New contracts to expand business operations
The company took various initiatives and entered into various agreements and own several contracts to
expand its business operations. In line with these initiatives, in October 2020, Ford and Verisk entered
into a collaboration to provide telematics data to insurers. In September 2020, Ford entered into a
Ford Motor Company
SWOT Analysis
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partnership with Metromile to offer personalized car insurance to its customers through a connected-car
platform. In the same month, Ford and Unifor union entered into a tentative agreement under which Ford
announced to invest EURO1.14 billion in its Oakville and Windsor plants in Canada. In August 2020, Ford
collaborated with the First National Bank of Omaha, and Visa to launch the FordPass Rewards Visa Card.
In the same month, Ford sold its production plant to Construtora Sago Jose, a building firm. In July 2020,
Ford Motor and Allianz Partners announced to extend their motor insurance collaboration to provide new
mobility solutions for Ford customers. In the same month, the company took several initiatives for its
business expansions and extension. These extensions include: Ford Motor and ALD SA entered into an
agreement to form an integrated leasing and fleet management solution for European customers; Ford
and Intel’s INTC division Mobileye expanded their partnership to support the release of the advanced
driver-assistance systems globally; Ford selected GEFCO France, a subsidiary of GEFCO Group, to
distribute new vehicles to authorized dealers in France. In June 2020, Ford and Volkswagen AG entered
into an agreement to meet the needs of their respective customers in Europe and other regions. In the
same month, the company entered into many agreements to expand its business operations including
Ford Commercial Solutions introduced Ford Telematics, a web-based software platform and subscription
service, to help commercial vehicle customers manage and optimize the efficiency of their fleets; Ford
Motor entered into a partnership with Vodafone Group to deploy a private 5G network at its new electric
vehicle production site in Essex, the UK. In May, Ford Motor and the Ohio State University entered into a
partnership to develop software to kill the coronavirus inside police cruisers. In April 2020, Ford entered
into a collaboration with Joyson Safety Systems to produce gowns and respirator belts. In March 2020,
Ford along with Airon Corporation and GE Healthcare entered into a partnership to produce 50,000
ventilators in Michigan, the US. In April, the company along with KT Corp invested US$22 million series A
funding in Phantom AI, developer of a vehicle-agnostic autonomous driving platform. In March 2020, Ford
partnered with Allstate to allow the customers to share the telematics data. In the same month, Ford
Motor entered into an agreement with 3M Company to increase the production of 3M’s powered air-
purifying respirators to meet the demand for personal protective equipment as a result of the COVID-19
pandemic. The company also partnered with Liberty Mutual Insurance to provide potential insurance
discounts for Ford connected vehicles customers. In January 2020, the company partnered with Garmin
International, a unit of Garmin, to integrate Garmin’s navigation technology into Ford’s SYNC
communications and entertainment system. In the same month, the company’s brand Lincoln partnered
with Rivian to provide Lincoln’s first all-electric vehicle.
Growth Electronic vehicles
Being a provider of electric drive system, the growth in electric vehicles (EV) sales could benefit Ford’S
operations. According to the Edison Electric Institute and Institute for Electric Innovation, annual EV sales
in the US is expected to reach 3.5 million vehicles by 2030, accounting more than 20% of annual vehicle
sales by 2030 in the country and the number of EV on the US roads is expected to reach 18.7 million in
2030. Automobile manufacturing companies are developing more EV models on customer demand,
including both battery-powered electric vehicles and plug-in hybrid electric vehicles.
Threat
Stringent environmental regulations
Ford Motor Company
SWOT Analysis
Ford Motor Company
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The automobile industry worldwide is influenced by a broad spectrum of regulations governing the
emission levels of exhaust fumes, carbon dioxide/fuel economy guidelines, noise level limitations,
recycling-related restrictions and safety standards. These regulations have become increasingly stringent.
For instance, in the US, the Federal Clean Air Act imposes stringent limits on the amount of regulated
pollutants that lawfully may be emitted by new vehicles and engines produced for sale in the US. In 2014,
the Environmental Protection Agency (EPA) finalized new Tier 3 regulations that phase in increasingly
stringent motor vehicle emissions standards beginning with the 2017 model year; compliance with these
standards could be challenging. Pursuant to the Clean Air Act, California may establish its own unique
vehicle emissions control standards; the California standards can also be adopted by other states. The
California Air Resources Board has adopted LEV III standards, which took effect with the 2015 model
year and impose increasingly stringent tailpipe and evaporative emissions requirements for light and
medium duty vehicles. Thirteen states, primarily located in the Northeast and Northwest, have adopted
the LEV III standards. Moreover, the California vehicle emissions program also includes requirements for
manufacturers to produce and deliver zero-emission vehicles (ZEVs) for sale. Furthermore, European
Union (EU) directives and related legislation limit the amount of regulated pollutants that may be emitted
by new motor vehicles and engines sold in the EU. Stringent new Stage V emissions standards took
effect for vehicle registrations starting in 2011; Stage VI requirements applied from 2014, with a second
phase beginning in 2017. Stage VI further tightened the standard for oxides of nitrogen. Many countries,
in an effort to address air quality concerns, are adopting previous versions of European or United Nations
Economic Commission for Europe (“UN-ECE”) mobile source emission regulations. Some countries have
adopted more advanced regulations based on the most recent version of European or U.S. regulations;
for example, China adopted emission regulations based on European Stage VI emission standards and
U.S. evaporative emissions and on-board diagnostic requirements. Korea and Taiwan have adopted very
stringent U.S.-based standards for gasoline vehicles and European-based standards for diesel vehicles.
Although these countries have adopted regulations based on UN-ECE or U.S. standards, there may be
some unique testing provisions that require emission-control systems to be redesigned for these markets.
Canadian criteria emissions regulations are aligned with U.S. Tier 2 requirements. Thus, any significant
change in the regulation structure in any of the countries where Ford operates could have a serious
impact on its business operations.
Fluctuations in foreign currency
Ford is an enterprise with global operations. The company operates 61 plants spread across North
America, Europe, South America, Asia Pacific, and the Middle East and Africa. Foreign currency risks
affect Ford’s automotive and financial services sector alike. In the automotive sector, the company is
exposed to foreign exchange risk arising from high proportion of export in sales amount, which is
denominated in foreign currencies. Also, Ford Credit, in order to meet funding objectives, borrows in a
variety of currencies, principally US dollars, Canadian dollars, Euros, Pound Sterling, and renminbi. Ford
Credit faces exposure to currency exchange rates if a mismatch exists between the currency of
receivables and the currency of the debt funding those receivables. In addition, the value of the
company’s equity investment in foreign countries may fluctuate based upon changes in foreign currency
exchange rates. Thus, any unfavorable change in other currencies could have an adverse impact on the
profitability of the company.
Intense competition
Ford Motor Company
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The global automotive industry is highly competitive which pressurizes manufacturers’ ability to increase
prices. The principal competitive factors include price, quality, available options, style, safety, reliability,
fuel economy and functionality. Ford faces strong completion from companies such as Fiat Chrysler
Automobiles, General Motors, Honda Motor, Hyundai-Kia Automotive Group, PSA Peugeot Citroen,
Renault-Nissan, Suzuki Motor, Toyota Motor, and Volkswagen, among others. In the future, Chinese and
Indian manufacturers are expected to enter the US and European markets, further intensifying
competition. Over the long term intense competition and apparent excess capacity is expected to
continue to put downward pressure on inflation-adjusted prices for similarly-contented vehicles in the US
and contribute to a challenging pricing environment for the automotive industry. In Europe, the excess
capacity situation is exacerbated by weakening demand along with the lack of reductions in existing
capacity, which may result in negative pricing pressure to continue for the foreseeable future.
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