Ford fired up on fuel-efficient models
A better sales mix should give a boost to the automaker's share of the North American car market.
However, Ford's car sales have improved 7% year to date from 2010. Its Fiesta, Fusion and Focus models have seen strong retail sales, and a better sales mix in the medium term should boost its share in the North American car market. Ford mainly competes with General Motors (GM), Toyota (TM), and Honda (HMC).
Ford could also gain from the recent floods in Thailand that disrupted the manufacturing facilities of Japanese automakers Honda and Toyota, something we discussed in a note titled Is Japanese automakers' pain the Big Three's gain?
Ford continues to roll out fuel-efficient vehicles
Ford's U.S. retail sales dropped by 8% last quarter from the year-ago period, mainly due to a decline of 7% in car sales during the same period. Meanwhile, the Federal Reserve has reduced its forecast for economic growth through 2013, adding to concerns about the automobile market in the U.S. (Read: Wimpy economy hurts Ford car sales but stock good for $14)
Ford is focusing on improving its fuel-efficient portfolio to gain higher market share. It has partnered with Toyota to co-develop hybrid systems that will provide greater fuel efficiency without compromising on performance, as well as in-car telematics and Internet-based services.
Fiesta sales rose 7% in October, with 4,124 vehicles sold, the company said. Fusion sales were up 4% to 18,094 units -- another monthly record for that midsize sedan.
While we estimate Ford's car market share in North America will decrease from 12.2% in 2012 to 10.2% by the end of our forecast period, Trefis members* expect a decrease from 12.6% to 11.7% during the same period.
We currently have a Trefis price estimate of $14.05 for Ford's stock, about 20% above the current market price.
*Trefis members constitute more than tens of thousands of users of the Trefis platform, inclusive of investors, financial analysts, and business professionals who use the Trefis platform to create their own models and price estimates.
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While the former looks to expand its snack and soda exposure, the latter struggles to stabilize management.
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