Analyzing Ford’s Performance In The Booming North American Trucks Market Over The Last Five Years
The North American truck market, comprising the sales of SUVs, Crossovers, Minivans and Trucks combined, has experienced rapid growth over the last five years. This market segment is extremely important for all auto makers as it is the most profitable segment in which to operate for these companies, excepting the luxury car segment.
Ford Motors (NASDAQ: F) has also experienced rapid growth in this segment, growing its unit sales from 1.45 million in 2010 to 2.06 million in 2015, implying an overall compounded growth rate of close to 7.2% for the period. However, this growth rate is heavily affected by Ford’s performance in 2014 and 2015, when it only grew by 1.8%. Before this period, Ford’s growth rate in this segment was close to 10.9%, around 90 basis points higher than the market growth rate, allowing it to boost its market share by 60 basis points to 20.2% by the end of 2013. However, complications arose when the company shut down of production in order to prepare factories for the launch of the much awaited 2016 F-150. This meant that Ford’s growth rate declined heavily in 2014 and 2015, a period in which the overall market grew at an even faster rate than in 2010-2013 period. It is important for Ford to recover its market share in this segment to keep its profitability in North America at the levels it stood at in 2014 and 2015.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Ford Motor
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