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Ford Views U.S. as Growth Market: Chairman

November 11, 2010
3 min to read



Ford Executive Chairman Bill Ford said investors are underestimating the automaker's growth potential in the United States and that it has laid a foundation for growth in China and India, Reuters reported.


Ford said the automaker would stay focused on its own growth plans and would not change trajectory because of the General Motors GM.UL IPO expected this month.

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"When people think growth, they think of the Brazils, Indias, Chinas, Turkey, places like that - which is all true, and we're participating a lot there," Ford told Reuters in an interview on Wednesday. "But we actually think the U.S. is a growth market for us."


Through October, Ford Motor Co. was a solid No. 2 in sales in its home U.S. market this year behind GM. Its U.S. market share of 16.7 percent in 2010 was up about 1.5 percentage points through October from the first 10 months of last year.


Speaking on the sidelines of the Ernst & Young Strategic Growth Forum near Palm Springs, California, Ford also said investors have underestimated the potential for the automaker's growth in its home market.


Ford's U.S. auto sales through October are up 21 percent from a year earlier, compared with a rise of 11 percent for the overall U.S. auto industry.


"The U.S. is a big growth market for us," said Ford, the great-grandson of the company's founder. "We're growing our market share. We think the (sales) volumes will continue to grow as an industry, and I don't think people focus on that."

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Ford shares rose 3.5 percent to end at $16.63 on Wednesday after a Morgan Stanley analyst said the stock could nearly double to $30 under the right conditions.


Morgan Stanley analyst Adam Jonas said the stock could command a higher price target if Ford increased U.S. market share by 2 percentage points to 19 percent and U.S. industry sales recovered faster than the brokerage expects, among other factors.


Bill Ford said Jonas' note was "validation" the automaker was on the right track.


"It's an indication of how people are seeing us now and that the plan we've put together is working," Ford said.


Shares are up 66 percent in 2010, compared with a rise of 9 percent for the S&P 500.

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Ford made $1.7 billion profit in the recent third quarter, the highest third-quarter profit in company history, and has signaled that it will be solidly profitable in 2010 and build on that performance in 2011.


The company lost about $30 billion from 2006 to 2008.


The automaker also is in position to increase sales in developing markets including the global top market China, as well as India, Ford said.


"We are going flat-out in China," Ford said. "We're growing fast. We are building more facilities. We have laid the foundation but there is plenty of work ahead of us. I like where we are. I like our plan to deliver more growth in those areas."


Now that GM is readying an initial public offering, Ford said the company will not have to change course. He disagrees with some observers who believe Ford was at a disadvantage to GM because the latter received financial help from the government while Ford did not.

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"I wouldn't trade places with anybody," Ford said. "Certainly, there are areas where we were, quote, disadvantaged, but overall, do I like where we are? Absolutely."


Ford's global marketing chief, Jim Farley, has said that not taking government bailouts has given the automaker $1 billion worth of goodwill.


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