How Is Ford Motors Likely To Grow In The Next Two Years?

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Ford Motor

Ford Motor Company (NYSE: F) is expected to display moderate revenue growth over the next two years due to a changing consumer preference in its largest market, North America. The company derives close to 60% of its revenue from its North American operations and a change in consumer preference for pickups, SUVs, and crossovers lower the demand for the sedan variants offered by the company. Despite the fact that the company is a leading player in the SUV segment in the aforementioned region, the company’s sales volume is still likely to be negatively impacted by a change in consumer preference and thus have a detrimental impact on the company’s total revenue.


Changing consumer preferences in North America is expected to remain beneficial for Ford in the long-run. With an increasing demand for trucks and SUVs in the North American region, it is likely the average selling price of Ford Motors’ vehicles in North America can increase at an accelerated pace – as its product portfolio shifts toward higher priced vehicles. Further, as the demand for SUV’s and trucks increases in the U.S., Ford can benefit from this trend being the leading player in this segment in the region. However, a declining demand for the company’s sedan variant will continue to negatively impact its sales volume from this region and thus offset the increased price impact. Overall, we expect the company to report an annual decline of 1% in its revenue from its North America region over the next two years. However, we expect this trend to alter over the next 5 years, ultimately proving to be beneficial for Ford.

On the other hand, the company’s South American division is expected to display substantial growth over the next two years. This is particularly true for Brazil due to its improving economic condition and a generally favorable business environment prevalent in the region backed by government incentives. We expect the revenue from the company’s South American division to grow at a CAGR of 4% over the next two years. Other geographical divisions of the company are expected to display moderate growth.

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Additionally, we expect the financing segment of the company to face some setbacks due to an environment of increasing interest rates which would consequently result in lower revenue from this division. However, increased wages in the U.S. might offset the impact of higher rates to a certain extent. We expect revenue from the company’s financing segment to decline by 2% annually over the next two years.

Thus, Ford is expected to display weak performance over the next two years due to the prevalent negative market conditions. The company’s venture into the new variant of self-driving vehicles and electronic vehicles (EVs) are expected to boost sales once launched into the market. The company has been investing in these models substantially and believes that they have the potential to capture a large part of the market. Details of our analysis of the company’s expected revenue are outlined in our interactive model, you can make changes to our assumptions to arrive at your own revenue figures.

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