Blog: Dave LeggettFord plays catch-up

Dave Leggett | 18 September 2006

Last week saw the latest chapter in Ford’s ongoing efforts to rebalance itself in North America. It is basically a slimming down exercise, but Ford has realised that there have to be more factory closures and more jobs cut sooner than was originally planned.

The painful truth is that Ford has had too much manufacturing capacity tied-up making products that the market no longer wants. You can’t argue with falling market share.

In the US Ford has been late to the shift in the market that is being driven by higher gas prices. Small cars rather than big trucks are becoming the in-thing now. It calls for a change of mindset to think about low-margin cars over big high-margin trucks, but couldn’t Ford do well in the US with an Americanised Fiesta? Why doesn’t Ford have a competitor to the Toyota Yaris and Honda Fit that are hitting the market now?

The companies that do well anticipate trends and are ahead of the market in terms of product planning. For GM and Ford there seems to be a realisation dawning that the seismic shift taking place in the North American market needs to be addressed urgently. But can they do it quickly enough and to what extent will they find themselves chasing Toyota and Honda?


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