Why Ford Wants To Add More Utility Vehicles To Its Lineup

+6.58%
Upside
13.23
Market
14.10
Trefis
F: Ford Motor logo
F
Ford Motor

Ford Motor Company (NYSE: F) gets a much lower transaction price in its International Operations, i.e. operations outside North America and China. This is because the sales mix in international markets has much lower contribution from SUVs and luxury vehicles. The company is working on increasing the presence of utility vehicles in both the Ford and Lincoln brands. Increasing the presence of utility vehicles in Ford’s sales mix can raise the company’s transaction price significantly in its international operations. The table below models the potential impact of successful SUV launches in both Ford and Lincoln brands. As you can see, this could result in the company’s valuation rising by close to 20%.

ford int impact

 

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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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