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Where Is Ford's Focus?
Thursday March 11, 1:54 pm ET
By Brian Gorman
If you're wondering why American automakers' share of the U.S. market continues to shrink, look no farther than the news that Ford Motor is licensing hybrid engine technology from Toyota.
Once again, Ford and the rest of Detroit are behind the curve. Back in the 1980s, Ford, General Motors (NYSE: GM - News), and DaimlerChrysler's (NYSE: DCX - News) then-independent Chrysler unit were slow to catch on to consumers' interest in fuel economy and quality. The Big Three played catch-up in the '90s and managed to rebound, particularly by tapping into Americans' love affair with SUVs.
Once again, though, Detroit is struggling. Just a decade ago, American automakers controlled 74% of the U.S. market; now, the figure is 60%. Ford should be feeling the most pressure, since Toyota displaced it as the world's second-largest carmaker by sales after General Motors.
With its hybrid technology lead, Toyota is likely to continue gaining ground. According to a company spokesman quoted in the Boston Globe, "Demand has gone through the roof" for the Prius hybrid, which Toyota rolled out in the U.S. in 2000. To meet the surge in interest, the company intends to increase annual production to 47,000 vehicles from its earlier plan of 36,000. Meanwhile, Honda Motor (NYSE: HMC - News) introduced the Civic Hybrid in 2003, and expects 2004 sales will exceed the nearly 22,000 sold last year. Ford, Chrysler, and GM, meanwhile, will finally sell hybrids to retail customers later this year.
True, Honda and Toyota are probably not achieving huge margins on their hybrid economy cars, and the Big Three's strategy of employing the gas/electric systems in lower-mileage vehicles has merit. But there's no doubt that for now Detroit has ceded leadership in the area to Japanese competitors, especially Toyota. Despite falling victim to complacency in the past, it seems that U.S. automakers still haven't learned that to win you have to innovate and take risks.
Full Story Here
Thursday March 11, 1:54 pm ET
By Brian Gorman
If you're wondering why American automakers' share of the U.S. market continues to shrink, look no farther than the news that Ford Motor is licensing hybrid engine technology from Toyota.
Once again, Ford and the rest of Detroit are behind the curve. Back in the 1980s, Ford, General Motors (NYSE: GM - News), and DaimlerChrysler's (NYSE: DCX - News) then-independent Chrysler unit were slow to catch on to consumers' interest in fuel economy and quality. The Big Three played catch-up in the '90s and managed to rebound, particularly by tapping into Americans' love affair with SUVs.
Once again, though, Detroit is struggling. Just a decade ago, American automakers controlled 74% of the U.S. market; now, the figure is 60%. Ford should be feeling the most pressure, since Toyota displaced it as the world's second-largest carmaker by sales after General Motors.
With its hybrid technology lead, Toyota is likely to continue gaining ground. According to a company spokesman quoted in the Boston Globe, "Demand has gone through the roof" for the Prius hybrid, which Toyota rolled out in the U.S. in 2000. To meet the surge in interest, the company intends to increase annual production to 47,000 vehicles from its earlier plan of 36,000. Meanwhile, Honda Motor (NYSE: HMC - News) introduced the Civic Hybrid in 2003, and expects 2004 sales will exceed the nearly 22,000 sold last year. Ford, Chrysler, and GM, meanwhile, will finally sell hybrids to retail customers later this year.
True, Honda and Toyota are probably not achieving huge margins on their hybrid economy cars, and the Big Three's strategy of employing the gas/electric systems in lower-mileage vehicles has merit. But there's no doubt that for now Detroit has ceded leadership in the area to Japanese competitors, especially Toyota. Despite falling victim to complacency in the past, it seems that U.S. automakers still haven't learned that to win you have to innovate and take risks.
Full Story Here
