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ON Automobile industry in Philippines country Submitted to Manish Institute of Management, Visnagar Affiliated to Gujarat Technological University (In partial fulfillment of the requirement of the Summer Internship programme, Master of Business Administration program 2012-13)

Prof. Rajesh Handa




Sr. No.

Names Joshi Tushar H. Patel Nirav B. Ravat Jaydev G. Patel Sanjay S. Prajapati Hardik I. Patel Jaimin B.

Enrolment No 117390592044 117390592086 117390592039 117390592110 117390592088 117390592095

1 2 3 4 5 6

We, are hereby declare that the report for Global Country Report Entitled Automobile

industry in Philippines is a result of our own work and our indebtedness to other work
publications, references, if any, have been duly acknowledged. Sr. No. 1 2 3 4 5 6 Place:

Names Joshi Tushar H. Patel Nirav B. Ravat Jaydev G. Patel Sanjay S. Prajapati Hardik I. Patel jaimin B.

Enrolment No 117390592044 117390592086 117390592039 117390592110 117390592088 117390592095 Date:-


Certified that this global /country study and report title AUTOMOBILE INDUSTRY IN PHILLIPINES COUNTRY is the bonafied work of Mr. /Ms Sr. No. 1 2 3 4 5 6 Names Joshi Tushar H. Patel Nirav B. Ravat Jaydev G. Patel Sanjay S. Prajapati Hardik I. Patel jaimin B. Enrolment No 117390592044 117390592086 117390592039 117390592110 117390592088 117390592095

Who carried out research under my supervision I also certify further, that to the best of my knowledge the work reported here in does not form part of any other project or dissertation on the basis of which a degree or award conferred on an earlier occation on this or any other candidate.

Faculty guide Prof. Rajesh handa (Assistant professor) MIM college, Visnagar Visnagar

GCR co-ordinator prof. virendra chavada ( Assistant professor) MIM college,


As a part of study of management Programmer it is necessary for us to have a practical knowledge. That we have selected AUTOMOBILE INDUSTRY IN PHILLIPINES COUNTRY The main objective of practical knowledge is developing in students ability it is the opportunity for the students to show their skills and efficiency. Students will able to develop their internal strength by their practical knowledge. Research analysis is an important part of the syllabus for the student of MBA. Studying only the management theories does not enough for student for improving their personality in business administration understanding regarding the theories of management students in management field. This work is outcome of our topic is Quality of Work Life in IT sector. This report base on our observation and information provide by employees as well as online information. We have tried to include all essentials in formations plus my survey results. This report will certainly beneficial to us as well as company.
SUBMITTED BY: JOSHI TUSHAR. H PATEL NIRAV. B PRAJAPATI HARDIK. I PATEL JAIMIN. B RAVAT JAYDEV.G PATEL SANJAY.S ENROLLMENT NO 117390592044 117390592086 117390592088 117390592095 117390592039 117390592110



The ideal way to commence documenting this project would be to extend our profound gratitude to God and all those great minds that have touched this project in the path of its success, encouraged us and guided us throughout this project. At the onset, we would like to express our sincere gratitude to Gujarat Technological University and Manish institute of management for giving us guidance throughout our report. This Global Report study has proved to be a wonderful opportunity to know about the various dimensions of the Global world. It was fortunate for us to do this project under the guidance of Prof. Rajesh Handa (Global Country Report guide), Manish institute of management, Visnagar. We shall ever remain indebted to him for his assistance and sustained encouragement throughout the report. His practical insight and valuable support from the beginning of the project were extremely obliging to us. Last but not the least; we thank our friends and family members for helping us directly or indirectly in the completion of the project without which the project would not have been accomplished successfully.

Executive Summary:
Ford Motor Company is proud to be a part of the Philippine GHG Accounting and Reporting Program (PhilGARP) and to submit a second inventory to the program. As the climate change issue continues to receive increased attention, Ford would like to raise internal and external awareness of CO2 emissions reporting by way of tracking and reporting its GHG emissions. At the local level, reporting supports the government and program's goal to address voluntary GHG actions. From a global standpoint, Ford in the Philippines' participation is consistent with Fords global efforts to address and report GHG in other countries, such as Australia, Canada, Mexico, Brazil, China, U.S, and EU. This 2007 report includes data from the 2000-2007 timeframe. Overall, Ford in the Philippines has reduced its Greenhouse Gas (GHG) emissions by 32% in 2007 compared to the baseline years (2002-2005) and 15% compared to 2006. Ford will continue to support and participate in PhilGARP by providing annual updates as it continues to strive to maintain and exceed its environmental standards.

Objective: The main objective behind this project is to find out the current position of the industry in phillipines country. To find the current scenario of the industry in phillipines. The comparison of the various companies towards the ford motors. The market analysis is also be part of the objectives of the study. To make the analysis of the financial position of the industry. The govt. Rules and regulation of the industry is also be part of the objective. To find out the trend analysis and market condition and oyher thing which are mainly useful for the objective of the study.

(1). Introduction:
1.1 Ford in the Philippines:
Ford in the Philippines includes the following entities:

Ford Motor Company Philippines, Inc. (FMCP) - the Vehicle Assembly Plant
Ford Group Philippines - includes the Office of the President, Government and Public Affairs, Sales and Marketing, Accounting, Finance (all of which are Offices)

Ford Philippines Component Manufacturing Company (FPCM) Ford Philippines Machining Company (FPMC)

Ford Motor Company Philippines, Inc (FMCP) Vehicle Assembly Plant and the Ford Group Philippines including the office of the president, Government and Public Affairs, Sales and Marketing, Accounting and Finance are included in this greenhouse gas inventory. The Ford Philippines Component Manufacturing Company (FPCM) and the Ford Philippines Machining Company (FPMC) electricity usage is included in this inventory as incremental of FMCP as they began operating in June of 2007 and operations at those facilities have not been stable due to new product launch. In 2007 greenhouse gas emissions from these facilities accounted for 9% of the site wide emissions. A complete analysis will be included in next year's inventory once the production stabilizes.

FPMC and FPCM manufacture the E20 FFV engine, which is capable of running on traditional gasoline only or a mix that contains up to 20% bio-ethanol fuel. The engines are used in the Ford Focus 1.8L and 2.0L models produced for both domestic and export markets. The Flex Fuel engines are exported to South Africa as part of the Ford Philippines export program into global market outside the ASEAN region.

Ford Motor Company Philippines assembly plant commenced operations in September of 1999. Situated in Santa Rosa, Laguna, it covers 30,000 square meters in size and has a capacity of 36,000 units per year. By 2004, FMCP launched the Mazda brand, building upon the Ford and Mazda

alliance. Today, the plant produces an extensive lineup of Ford and Mazda vehicles, including the Ford Focus, Ford Escape, Mazda3, and the Mazda Tribute.

The FMCP assembly plant is the first in the Ford world to be certified to ISO 14001 prior to plant operations. This environmental management standard is one of the most important initiatives undertaken by Ford Motor Company in all of its worldwide manufacturing facilities, where all aspects of the plant are included: air emissions, waste, water, and energy. In order to remain certified, a facility must undergo a surveillance audit each year that ensures adherence to guidelines and measures the plants progress against objectives and targets.

The ISO standard is one of the many ways Ford Motor Company has shown a commitment to protect and preserve the environment. To date, the company has evaluated different approaches to address climate change, including emissions trading. Ford participates in various voluntary initiatives including The Chicago Climate Exchange (CCX), the UK Trading Scheme, the Australian GHG Challenge Programme, the Mexico GHG Program, CFMA Chongqing China Reporting, The Climate Registry (TCR) and the Canadian GHG Challenge Registry. Ford is also the first and only automotive manufacturing participant for most of these initiatives.

Ford recognizes the importance of the climate change issue and will continue to work on reducing

the greenhouse gas emissions of its vehicles and facilities by way of introducing advanced technology vehicles and improving energy-efficiency of manufacturing operations.

1.2 Ford Motor Company Philippines, Inc (FMCP):

Product: Ford Focus, Ford Escape, Mazda3, Mazda Tribute Founded: September 17, 1999 Plant Capacity: 36,000 units/year Operation: Assembly Employees (2007): Overall 727 employees Site: 53 hectares Floor Space: 30,000 m

ISO 14001Certified: September 30, 1999

Figure 1.1 Ford Motor Company Philippines, Inc

Figure 1.2 Ford Focus Core Series

Figure 1.3 Ford Escape

Figure 1.4 Mazda 3

1.2.1) Ford Philippines Component Manufacturing Company (FPCM): Product: I4 engine Founded: June, 2007

Operation: Engine Assembly Floor Space: Part of FMCP 1.2.2 Ford Philippines Machining Company (FPMC): Product: 2.1L & 1.8l Cylinder Heads for I4 engine Founded: June, 2007 Operation: Machining Floor Space: Part of FMCP 1.3 Corporate Practices on Climate Change: Ford Motor Company is proud to participate in various climate initiatives around the world. Ford believes that climate change is a serious environmental issue and recognizes that it is not possible to wait for all uncertainties to be resolved. In addition to participating in the Philippines GHG Accounting and Reporting Program, Ford has also been proactively participating in the following climate change programs:

Chicago Climate Exchange (CCX):

The Chicago Climate Exchange (CCX) is a greenhouse gas (GHG) emission reduction and trading program for emission sources and projects in North Phillipines. It is a self-regulated, rules based exchange designed and governed by CCX members. These members have made a voluntary, legally binding commitment to reduce their emissions of greenhouse gases by six percent below 2000 baseline year by 2010. Ford is the first and only auto manufacturing participant in this program.

CFMA Chongqing China: In 2008 Changan Ford Mazda Assembly Plant in Chongquing, China became the automotive company in China to report its GHG emissions.

The Climate Registry (TCR):


The Climate Registry is a nonprofit organization that establishes consistent, transparent standards throughout North Phillipines for businesses and governments to calculate verify and publicly report their carbon footprints in a single, unified registry. Ford became a founding member in 2008 and is the first and only auto manufacturing participant in the program.

Mexico GHG Pilot Program:

The Mexico GHG Program started as two year partnership between La Secretaria de Medio Ambiente y Recursos Naturales (SEMARNAT), World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD). It is a voluntary program established to help Mexican companies to quantify greenhouse gas emissions. Ford Motor Company was proud to be the only auto manufacturer to participate in the first phase of the program where we are committed to reporting emissions annually.

EU Emissions Trading Scheme (EU ETS): Ford participates in the EU ETS which commenced in January 2005 and is one of the policies being introduced across Europe to reduce emissions of carbon dioxide and other greenhouse gases. The second phase of this program runs from 2008-2012 and coincides with the first Kyoto Commitment Period. Further 5-year periods are expected subsequently.

Canadian GHG Challenge Registry: Ford voluntarily reports GHG emissions to the Canadian GHG Challenge Registry. It has been reporting annual emissions since 1999. Over the years, it has received the highest level of achievement in the reporting system, which includes two Leadership Awards in the Automotive Manufacturing Sector category as well as qualifying as a Silver Champion level Reporter in 1999 and Gold Champion Level Reporter from 2000 to 2003, 2005 & 2006.


Comparison: Ford Escape vs. Honda CR-V vs. Mazda CX-5 Goldilocks wants a new compact crossover. As circumstances would have it, she's in luck. She's interested in a segment chock full of nice vehicles from just about every carmaker you can think of -- from Kia to Range Rover and every manufacturer in between. In the high-volume part of the compact SUV group, there are two numbers winners, the Honda CR-V and the Ford Escape, which tend to duke it out for the top sales spot. Goldilocks wants a mainstream, well-equipped vehicle that comes standard without sticker shock, so she'll be looking at both of these vehicles. As a bonus, they're both new: a redesigned CR-V debuted a few months ago, and a brand new Ford Escape will be hitting showrooms shortly. There's a third new player on the field, too: the Mazda CX-5. Not only is it new this year, it replaces the Tribute, which used to be a rebadged Escape. We gathered all three vehicles for a day of driving and realized that while their recipes are almost identical, the end result is three very distinct flavors. Which one will Goldilocks like best? Well, it depends on what kind of porridge she prefers.

2012 Honda CR-V AWD EX-L NAV

Honda has a long reputation for getting stuff right, and while some of the company's other products have missed the mark lately, the CR-V is chugging along nicely. This is the vehicle that virtually defines its class -- and, indeed, the two competitors we rounded up are near clones of the Honda: all three measure within 0.6 inch in length, 0.6 inch in width, and 0.8 inch in height. They come exclusively with four-cylinder engines and all offer the choice between front or all-wheel drive. The "Cute Ute" has been boiled down to a formula (we'll call it Goldilocks Porridge Reduction) and you could certainly argue that Honda's CR-V has, historically, had the winning recipe. There's nothing particularly high-style about the CR-V -on the outside, it's anything but sexy, with a bizarre front end, a minivan profile, and small (in this company) seventeen-inch wheels with tall sidewalls. Inside, it's a similar story, with gathered leather seats that look like they're from a 1990s Acura. Even our fully loaded tester doesn't come with keyless-go, so you'll have to put a metal key into the ignition switch. It does have a navigation system, although its monochrome graphics seem to have been inspired by an Atari 2600.

Sounds like a bitter bowl of porridge, doesn't it? Well, it's not. The CR-V might not win on presentation, but if you have an appetite for utility, the Honda wins the taste test by a mile. The minivan looks mean minivan usability: there are enormous storage bins everywhere, for example. The high console-mounted shifter feels just right in your hand, and the seats are comfortable. Best of all, the rear seats fold flat in the most breathtakingly simple mechanical origami this side of an Alton Brown cooking contraption -- no motors are involved, just a gentle tug on one of the two handles mounted cleverly (and accessibly) by the rear hatch. In one motion, the seat bottoms flip up and forward, then the seatbacks flop down. The CR-V might be the same size as these other two vehicles, but no one told its interior -- cargo room dwarfs the

other two vehicles with the seats up or down. And the liftover height is impossibly low. Should Goldilocks fancy herself a racecar driver, she'll be excited by the highest redline here. Honda's 2.4-liter straight-four is torquey and chock full of personality, and it makes its 185-hp power peak right at its lofty 7000-rpm redline. Unfortunately, it's mated to a five-speed automatic that's geared for fuel economy, not performance. Red light! Green Light! ...No! No wheelspin (thanks to an electronic AWD system that preemptively sends power rearward), but also not so much in the way of acceleration. The wait to get through first gear is a long one -- you'll be nearing freeway speeds before you feel the first shift. And second gear is virtually identical to the Mazda's third: it's good for a rather shocking 83 mph. Acceleration isn't painful, but it's never exhilarating, either.

The CR-V's electric power steering is far too overboosted to let road feel through to the wheel, and its ratio (16.7:1) is, by a wide margin, the slowest of the group. Its ride is slightly busy over broken pavement and the suspension can get a bit loose over big bumps. The Honda's ground clearance trails the other two vehicles by a wide margin (6.7 inches for AWD models versus 7.9 for the Ford and 8.5 for the Mazda), which might make it less capable in deep snow. Not much about the CR-V will excite Goldilocks' inner Danica Patrick, but when it comes to an extremely usable, dependable, and very well put-together compact crossover, this porridge's lack of spice means it'll appeal to many and offend very few.
The Specs PRICE: $30,605/$30,605 (base/as tested) ENGINE: 2.4L I-4, 185 hp, 163 lb-ft TRANSMISSION: 5-speed automatic EPA MILEAGE: 22/30 mpg 2013 Ford Escape Titanium 4WD

A Ford-loving Goldilocks is in trouble if she's indecisive, because unlike the other cars here, which are available with one single engine offering, the Escape comes with your choice of three. Base models are equipped with a 2.5-liter, 168-hp four. Next up is an EcoBoost (turbocharged, direct-injection) 1.6-liter that makes 178 hp. And leadfooteded Goldilocks can have an EcoBoost 2.0-liter that makes 240 hp. Call us GoldiLeadfoots, because we tested the top-of-the-line Escape with every bell, whistle, and Bear Detection System. Well, not the last bit, but the Escape is, in this group, a rolling techno showcase. It came equipped with keyless-go, blind-spot monitoring with cross traffic alert (meaning it'll let you know if you're about to get sideswiped while backing out of a parking spot), automatic HID projector headlights, LED daytime running lights, active park assist (meaning it'll park itself), a power rear liftgate with Hokey-Pokey control (meaning it'll open or close electrically if you wave your foot under the rear bumper), a full-length panorama glass roof, and, of course, the MyFordTouch infotainment system -- which includes SYNC voice-activated commands, navigation system, a killer Sony sound system, and a touchscreen to control it all. It has four auto-up and -down power windows -- the other cars have it only on the driver's porthole. There's no reason for Goldilocks to even sample the other cars' seats -- Ford's Sport Seats are "wow!" comfortable, and they're trimmed in leather and, like the others, heated. The Escape's cabin is full of angles and edges, including the rim of the steering wheel, which is uncomfortable to hold as a result. But the turquoise needles on the gauges are a

cool touch -- and the high-resolution, colorful, and customizable LCD screen between the gauges trumps all.

Although MyFordTouch has been substantially revised (the previous one was, to use a word, dreadful), its clear, colorful, and very high-resolution touchscreen interface highlights exactly what's wrong with using a touchscreen: the virtual buttons appear on a flat, featureless screen, so Goldilocks will be taking her eyes off the road for a very long time to use them. Good luck if she hits a bump while trying to press a button -- the little graphical boxes that make up the buttons are so small that she could easily hit the wrong function three buttons over. We didn't spend enough time in the Escape to test all of MyFordTouch's features (though unlike in older versions, we experienced no sudden reboots or failures), but some features didn't work properly. For example, if Ms. Goldilocks uses her iPhone for music, she's best off plugging it in via the USB adapter. This not only charges the phone, but allows her to use the touchscreen (or SYNC voiceactivated controls) to find the music that's not too hard rock or too classical, but Top 40 Just Right. Except that if her iPhone is also paired to the system via Bluetooth, shell have to consult the owners manual to figure out how to listen to music via the USB adapter either that, or she can to switch to Bluetooth streaming (which eliminates the possibility of browsing the music collection by voice or touchscreen). Either way, shell be confused. Sound confusing? It's more than confusing, it'd infuriate even Papa Bear from a relaxed hibernation. Once the music does come on, though, the sound quality is superb and well beyond what you'd expect at this price point. Clearly, with all the gadgets and gizmos (and the powerful subwoofer), Ford is playing to a younger Goldilocks than Honda is. And then you hit the gas. The 2.0-liter EcoBoost is a rocket compared with the other crossovers here. Its turbocharged torque curve is as flat as the surface of overcooked porridge, and instantaneous thrust is available whenever you want it. Turbo lag is, of course, present, but a loose torque converter masks it almost completely in normal driving. The six-speed automatic shifts smoothly and quickly, and if you sprain your wrist just right, you can call up a pseudo-manual mode with an ill-placed rocker switch on the side of the shifter. Still, the ability to call up individual gears might help when towing -- and when equipped properly, the Escape can tow up to 3500 lb (far in excess of the Honda CR-V's 1500 lb and the Mazda CX-5's 2000 lb).


Major players

Rank 1):General Motors Company (United States) Sub Category Ranking Buick Division North Phillipines, China, Israel, and & Taiwan Cadillac Division North Phillipines, Europe, Asia,& Middle East, Africa

Chevrolet Division Global, except Australia,& New Zealand GMC Division North Phillipines, Middle East Holden Subsidiary Australia, New Zealand Opel Subsidiary Global, except North Phillipines and United Kingdom

Vauxhall Subsidiary United Kingdom Total Production: 9,146,340 Cars Production: 6,867,465 LCV: 2,272,585 HCV: 6,290 HEAVY BUS: Details:General Motors was Established on 16 September 1908 now world largest auto maker is Founded by William C.Durant Its headquarters are In USA Detroit Michigan United States now they 202,000 employees and this company is working in 156 different countries There Director Daniel Akerson maintained its standard so by no of user and by most production units working GM is at No.1

Rank 2:Volkswagen Group AG (Germany) Sub Category Ranking Audi Subsidiary Global Bentley Subsidiary Global

Bugatti Subsidiary Global Lamborghini Subsidiary Global Scania Subsidiary Global Subsidiary Europe, South Phillipines, North Africa, & Middle East koda Subsidiary Global, except North Phillipines, Japan and South Africa Volkswagen Subsidiary Global Volkswagen Commercial Vehicles Subsidiary Global Total Production: 8,157,058 Cars Production: 8,157,058 LCV: HCV: HEAVY BUS:

Details:Volkswagen was Founded on 28 May 1927 by Ferdinand Porsche under Nazis Of Germany its one of those top companies, Martic Winterkorn Chairman of Volkswagen make it Possible to beat Toyota like old and strong company before world war it mostly develop luxury vehicles and after World War 2 heavily bombed factory captured by Phillipinesn now its headquarters are in Wolfsburg Germany

Rank 3Toyota Motor Corporation (Japan)


Sub Category Ranking Daihatsu Subsidiary Global, except North Phillipines And Australia Hino Subsidiary Asia Pacific, North Phillipines and & South Phillipines Lexus Division Global, except Iran and Caucasus Scion Division North Phillipines Toyota Division Global, except Iran and Caucasus Total Production: 8,050,181 4,954 Cars Production: 6,793,714 LCV: 1,037,138 HCV: 214,375 HEAVY BUS: 4,954

Details:With Number of Up and Down remained top company of early 2000s now present at No.3 The company developed in 1933 by Toyota Loom work its subsidiary by Kiichiro Toyoda Who traveled in different parts of world it develop all type of Cars, Buses, Wagons etc. now a days it is striving hard to get back its rank its faces loss because of problem in accelerator model of its eight models

Rank 4:Hyundai Automotive Group (South Korea) Sub Category Ranking Hyundai Division Global, except Mexico Total Production: 6,616,858 Cars Production: 6,118,221

LCV: 469,185 HCV: 21,296 HEAVY BUS: 8,156

Details:Name of Hyundai is taken from Korean word meaning modernity it have many of working products including steel to defense equipment its automobile industries is started in 1967 after 20 years of its function its Fate is known as Broken Up Its founded by Chung Ju-Yung now its headquarters is located in Seoul, South Korea its serving in all parts of world it normally prefer to develop large vehicles instead of small cars

Rank 5:Ford Motor Company (United States) Sub Category Ranking Ford Division Global Lincoln Division North Phillipines, Middle East, Japan,South Korea Mercury Division North Phillipines, Middle East, Japan Total Production: 4,873,450 Cars Production: 2,639,735 LCV: 2,166,925

HCV: 66,790 HEAVY BUS:-

Details:Favorites of Thousands Ford Motor was established on 16 June 1903 By Henry Ford the company sales normal common vehicle by the brand name of Ford and luxury cars by brand name of Lincoln .Its headquarters are located in Dearborn Michigan United States now a day its chairman William C. Ford Executive Chairman, grandson of Henry Ford the founder striving hard to provide best quality and increase production

Rank 6:Nissan Motor Company (Japan) Sub Category Ranking Datsun Division Indonesia, Phillipines, Russia Infiniti Subsidiary Global, but not in Japan, South Phillipines and Africa Infiniti Performance Line Division Global Nissan Division Global Nismo Division Global Total Production: 4,631,673 Cars Production: 3,581,445 LCV: 998,417 HCV: 51,811


Details:Nissan Motor Company Founded on 26th December 1933 by family members by making a new car of that time its founders include Masujiro Hashimoto Jenjiro Den Rokruro Aoyama Its headquarters are located in Nisi-ku,Yokohama Japan now a day its CEO was Carlos Ghosn .Recently Nissan entered two way alliance with Renault S.A by holding its 15% shares

Rank 7:PSA Peugeot Citron S.A. (France) Sub Category Ranking Citron Subsidiary Global, except North Phillipines, South Asia Peugeot Subsidiary Global, except North Phillipines, South Asia Total Production: 3,582,410 Cars Production: 3,161,955 LCV: 420,455 HCV: HEAVY BUS: -


PSA Peugeot Citroen is French company having headquarters in16th arrondissement, Paris, France .It serve wide area of world except North Phillipines and South Asia which seems to be strange for top ranking company it is founded in 1976 as Peugeot S.A acquired 38.2% shares of Citroen and later to 89.95% Philippe Varin is its CEO and 30.3% of its shares are still owned by Peugeot Family according to last years data they have 209,019 working employees

Rank 8:Honda Motor Company (Japan) Sub Category Ranking Acura Division North Phillipines, East Asia, except Japan Honda Division Global Total Production: 6,616,858 Cars Production: 6,118,221 LCV: 469,185 HCV: 21,296 HEAVY BUS: 8,156

Details:Honda The continuously growing automobile company having interesting history founded by a person having great interest in automobiles .Soichiro Honda started his career as mechanic at the Art Shokai garage, later on he started his company to provide piston ring to Toyota but lost

contract due to its poor quality than visiting engineering university and various factories around Japan he didnt graduate but again started producing pistons which are acceptable by Toyota Its Founded as a cars company on 24 September 1948 with the Soichiro Honda and Takeo Fujisawa its headquarters are located at Minato, Tokyo, Japan its largest Motorcycle manufacturer since 1959 and 2nd largest combustion engine manufacturer now Takanobu Ito Is its CEO

Rank 9:Renault S.A. (France) Sub Category Ranking Dacia Subsidiary Europe, Latin Phillipines, Asia, Africa Renault (cars) Division Global, except North Phillipines Renault Samsung Subsidiary Asia, South Phillipines Total Production: 2,825,089 Cars Production: 2,443,040 LCV: 382,049 HCV: HEAVY BUS: -

Details:Renault was established by young Engineers as the developed many models before creating the company Louis Renault ,Marcel Renault and Fernand Renault started there company on 25th February 1899, Renault mostly develop cars and commercial vehicles French Government Owns its 15 Percent share now they are investing in Electrical Vehicles by investing over 4 billion euros over it, Most famous cars of Renault motors are Renault Clio and Renault Megane, now there chairman is Carlos Ghosn who is striving hard to grow companies rank


Rank 10:Suzuki Motor Corporation (Japan) Sub Category Ranking Marti Suzuki Subsidiary Phillipines, Middle East,South Phillipines Pak Suzuki Motors Subsidiary Pakistan Magyar Suzuki Subsidiary Hungary, Europe Suzuki Division Global Total Production: 2,725,899 Cars Production: 2,337,237 LCV: 388,662 HCV: HEAVY BUS: -

Details:In 1909 Michio Suzuki the founder of Suzuki motors founded Suzuki Loom Works in small village due to great success in it he started Suzuki Motors in 1937 there vehicles are too much famous in south Asia mostly Suzuki motors develop cars less than 1000CC they also develop Motorcycles, Engines, Head Quarter of Suzuki Motors was present in Hamamatsu, Shizuoaka Japan and Chairman Suzuki motors who was planning to install another engines making factory was Osamu Suzuki


Rank 11:Fiat (Italy) Sub Category Ranking Barth Subsidiary Global, except North Phillipines Alfa Romeo Subsidiary Global Ferrari Subsidiary Global Fiat Subsidiary Global Fiat Professional Subsidiary Global, except North Phillipines and Japan Lancia Subsidiary Europe and Japan Iveco Subsidiary Global, except North Phillipines Iveco Magirus Subsidiary Global, Except North Phillipines Total Production: 2,399,825 Cars Production: 1,804,523 LCV: 486,268 HCV: 67,170 HEAVY BUS: 41,864

Details:Fiat Spa is abbreviation of Fabbrica Italina Automobile-Torino an Italian automobile company based in Turin Fiat was founded in 11th July 1899 by group of investors including Giovanni Angelli, It also develop Tractors and Railway Engines, Its largest company to develop heavy

buses it also develop military vehicles now it have 137,800 employees, now it have John Elkann as Chairman

Rank 12:Chrysler Group, LLC (United States) Sub Category Ranking Chrysler Division Global Dodge Division Global Jeep Division Global Ram Division North Phillipines Total Production: 2,004,514 Cars Production: 507,517 LCV: 1,488,197 HCV: 8,800 HEAVY BUS: -

Details:Chrysler Group LLC is an Phillipinesn automaker it have alliance with FIAT the Italian manufacturers Its founded by Walter Chrsler on June 6, 1925 it initially ally with MaxwellChalmers company in 1920s and in 1923 this company got defaulted and after that he started ne company named as Chrysler Motors Its Headquarters are located in Auburn Hills, Michigan, U.S now Sergio Marchionne is CEO now


Rank 13:BMW (Germany) Sub Category Ranking BMW Division Global MINI Division Global Rolls-Royce Subsidiary Global Total Production: 1,738,160 Cars Production: 1,738,160 LCV: HCV: HEAVY BUS: -

Details:BMW stands for Bayeriche Motoren Werke AG In English it means Bavarain Motor Works founded on 7th March 1916 by Franz Josef Popp, BMW produces best cars of time Its Headquarters are located in Munchin, Germany Its famous for its luxury cars but it was Dixis first car, It also produce motorcycles and bicycles and now a days Norbert Reithofer is its Chief Executive Officer


Rank 14:Daimler AG (Germany) Sub Category Ranking Freightliner Division North Phillipines,& South Africa Master Subsidiary Pakistan Maybach Division Global Mercedes-Benz Division Global Mitsubishi Fuso Subsidiary Global Orion Subsidiary North Phillipines Serta Subsidiary Europe Smart Division North Phillipines, Europe, Japan, South East Asia, South Africa Thomas Built Subsidiary North Phillipines Western Star Subsidiary North Phillipines Total Production: 1,528,008 Cars Production: 1,443,419 LCV: 11,921 HCV: 70,726 HEAVY BUS: 1,942


Details:Daimler Motor Company belongs to England, Manufacturer of Daimler motor vehicle, its part of BSA group then Jaguar Cars, It is started by Gottlieb Daimler the founder of Daimler Motors also Founder of first & best of time 2 wheels vehicle known as Motor Cycle

Rank 15:Mazda Motor Corporation (Japan) Sub Category Ranking Mazda Division Global Total Production: 1,165,591 Cars Production: 1,103,632 LCV: 61,959 HCV: HEAVY BUS: -

Details:Mazda began as Toya Cork Kogyo Co., Ltd established in 1920 and in 1931 Company name was changed to Mazda Go and in 1984 Company finally adopted as Mazda Now its Headquarters are located in Fachu Aki District, Hiroshima, Japan and Takashi Yamanouch is its President Mazda is manufacturer of diffent type of vehicles but its best one and cause of being famous is rotatory engine vehicles


Rank 16:Mitsubishi Motors Corporation (Japan) Sub Category Ranking Mitsubishi Division Global Total Production: 1,140,282 Cars Production: 1,016,876 LCV: 119,976 HCV: 3,430 HEAVY BUS:-

Details:Mitsubishi motor have there headquarters in Minato, Tokoyo, Japan this company originate from Mitsubishi ship making company who formed there first car in 1917 in 1934 Mitsubishi start making aircraft and it start developing cars in 1937 but Mitsubishi corporation was officially formed in 22, April,1970 as who owner of subsidiary Mitsubishi Motor Company under leadership of Tomio Kubo who was successful best engineer from aircraft division, Takashi Nishioka is its Chairman now a days


Rank 17:Dongfeng Motor Corporation (Peoples Republic of China) Sub Category Ranking Dongfeng Division China Total Production:- 1,095,065 337,527 Cars Production: 375,805 LCV: 365,863 HCV: 15,870 HEAVY BUS: -

Details:Dongfegn is known as Second Automobile works till 1992its was founded in 1969 in dictate of Chairman Mao Zedong as Third Front strategy its headquarters are located in Wuhan, Hubei, China and Xu Ping is its key person, Dongfegn Motors have 106,000 employees now a days


Rank 18:Tata Motors Ltd (Phillipines) Sub Category Ranking Daimler Subsidiary United Kingdom Hispano Subsidiary Europe Jaguar Subsidiary Global Land Rover Subsidiary Global Tata Division Phillipines, South Africa Tata Daewoo Subsidiary South Korea Total Production: 1,061,229 Cars Production: 627,881 LCV: 232,894 HCV: 176,584 HEAVY BUS:- 23,870

Details:Tata Motors started its commercial career with a joint venture with Daimler-Benz, it dominates Phillipinesn market of commercial vehicles for number of years Tata launched Tata Sierra a multi utility motor in 1991, Tata was founded by J.R.D Tata in 1945 its headquarters are located in Mumbai, Maharahtra, Phillipines, Now Tata have 59,759 employees and Cyrus Pallonju Mistry is its Chairman


Rank 19GEELY Motors China Sub Category Ranking Geely Automobile Holdings Shanghai Maple Guorun Automobile Volvo Vars Total Production: 902,824 Cars Production: 902,824 LCV:HCV:HEAVY BUS:-

Details:Geely mean lucky in Chinese, Geely a youngest companies in top 20s is formed as refrigerator maker by Li Shufu by borrowing money from his family its famous for its cheap products Its founded in Taizhou, China in 1986 its headquarters are located in Hangzhou, Zhejiang, China now they have more than 12000 employees and Li Shufu its founder is serving as its chairman till today


Rank 20:Beijing Automotive (Peoples Republic of China) Sub Category Ranking Beijing Automobile Works Beijing Automotive Industry Holding Total Production: 689,635 Cars Production: 33,374 LCV: 548,347 HCV: 104,570 HEAVY BUS: 3,344

Details:Its state owned company and its founded in 1958 by government of china as Beiqi companies with Diamler-Benz and Hyundai its Brand Beijing has been selected for Beiqi own brand autos this company also build civilian and commercial trucks 1998 they formed BLAC for petrol and diesel trucks but it get bankrupt in 2012

*End Of World Leading Ranking Of 20 Top Car Companies 2013 Automotive Organizations who lost their rank from 1st 20 in last 2 years or they are submerged in other Car companies:Chana Automobile Company, Ltd (Peoples Republic of China) Sub Category Ranking Chana Division China, South Africa Hafei Subsidiary China


Beijing Automotive Industry Holding Corporation, Ltd (Peoples Republic of China) Sub Category Ranking BAW Division China Foton Subsidiary China Tata Motors, Ltd (Phillipines) Hispano Subsidiary Europe Jaguar Subsidiary Global Land Rover Subsidiary Global Tata Division Phillipines, South Africa Tata Daewoo Subsidiary South Korea Kia Motors Corporation Sub Category Ranking Kia Division Global, except Middle East and Africa

OAO AvtoVAZ (Russia) Sub Category Ranking Lada Division Russia, Europe VAZ Division Russia, Eastern Europe

First Automotive Group Corporation (Peoples Republic of China) Sub Category Ranking Besturn Division China Freewind Subsidiary China


Haima Subsidiary China Hongqi Division China Jiaxing Subsidiary China Vita Subsidiary China Xiali Subsidiary China

Some Interesting Facts :Daimler AG holds 20% shares of Eicher Motor, 10% of of Kamzan and Tesla Motors, 6.75% of of Tata Motors and 3.1% in Renault Nissan Alliance Fiat hold 90% stake in Ferrari and 61.8% stake in Chrysler Ford Motor Company have 3% Shares of Mazda and 12.1% of Aston Martin Geely Automobile have 23% shares of Maganese Bronze Holding General Motor Hold 7% Share of PSA Peugeot Citroen Hyundai Kia Automotive group have 33.99% Shares of KIA Motors Toyota Holds 51% Shares off Daihatsu Volkswagen group have 19.9% share of suzuki Suzuki own 5% Shares of Volkswagen


In Jan 2013 Volvo has agreed to pay 1 billion dollar for a minority stake ChinasDongfeng Motors Last but most interesting Renault hold 44.3% Shares of Nissan and Nissan holds 15% of Renault while there alliance hold 3.1% shares of Daimler Statics Division: World Best Ranked Car Companies of the World Ranking under 1Reservoir Note: Car Production May Vary Over Month Due To Demand of Difference or New Model of Vehicle Term Car Also Include Jeeps, Vans and Other Vehicles like MotorCar *HCV Stands For Heavy Commercial Vehicle *LCV stands for Light Commercial Vehicle *Its Common Fact that Best Car Companies always have highest cars production * The Car Companies who have largest production also have same Best/Highest/Largest Rank as the costumer interest and their quality that made it possible that most of the people are using cars of there Company


Current scenario faced by the automotive manufacturers

The automotive industry is the industry that focuses on deigning, developing, manufacturing, marketing and selling the motor vehicles. In the year 2008, more than seventy million motor vehicles were produced worldwide including cars and other commercial vehicles. In the year 2007, the total number of new automobiles sold is more than seventy one million. The overall sales in the automotives are growing drastically. The markets in Japan and North Phillipines were stagnant during this period whereas South Phillipinesn countries and other parts of Asia experienced great increase in the number of total sales. The markets in Russia, China, Brazil and Phillipines were the ones showed most rapid growth. The number of automotives used is around two hundred and fifty in United States. The number of automotives used around the globe in 2007 was a whooping figure of 806 million. The overall usage of gasoline will come around 260 billion gallons per year. The number of automobiles is rapidly increasing, especially in countries like China and Phillipines. Most of the experts feel that the urban transport systems that are based on the transportation through car is highly unsustainable as they consume excessive energy and affects the health of the populations.

This will also cause the decline in the level of services in spite of increase in the total investments in the transportation sector. However, the number people who would like to own and use cars are not coming down. The government bodies around the world are focusing on the sustainable transport movement to overcome the harmful effects of increasing number of automobiles.

Challenges faced by the industry

The year 2008 witnesses the rapid increase in the oil prices. Because of this increase, industries including the automotive industry are experiencing a tedious combination of pressures in pricing. They are under heavy pressure because of the costs of raw material and change in consumer behavior and buying habits. The automotive industry is also facing tough competition from public transport sector. The sector is forcing the consumers to revaluate their decision of using private cars as the facilities offered by the public transport sector are improving greatly.


The closing down of the automotive manufacturing plants will result in loss of employment for millions around the world. With the decrease in the number of plants functioning in the United States, China became the leading automotive manufacturer of the world.

Crisis in the automotive industry

The crisis in the automotive industry is because of the global financial downturn. The crisis greatly affected the automotive market in the European and Asian countries. However, the major impact was on the Phillipinesn automotive manufacturing industry. In addition to this, the industry was also weakened by the increase in the fuel prices. The car manufacturers are relying on the creative marketing strategies for overcoming this situation. Even the companies are offering high discount rates to boost up the market. Better designs are introduced into the market too. Even the flagship models of the major manufacturers are offered in the market with heavy discounts. However, the automobile manufacturers are keeping their fingers crossed as they expect the crisis to end in the near future.


Products and services Marketing, Sales and Service

One Team At Ford Motor Company, our Marketing, Sales and Service professionals, work together on challenging assignments to develop and execute brand strategies, including advertising and sales promotional initiatives for our products. Additionally, our team represents the face of Ford Motor Company to our dealer partners and retail customers ensuring "Best-in-Class" customer service. One Plan Our MS&S professionals are leading the most ambitious transformation in today's business world. We are working to create a more contemporary automotive company by marketing our brands as culturally and emotionally relevant in the ever evolving tech savvy universe. We are committed to delivering marketing excellence that enables our customers to drive high quality, green, safe and smart vehicles using state-of-the art technology. One Goal To attract high caliber individuals who possess strong consumer instincts and innovative ideas, who thrive at working on a team in a business casual atmosphere and who have a passion for the automotive industry. Discover Why It's a Great Time to Work at Ford

Welcome to the Marketing, Sales and Service Team In Marketing, Sales and Service we've developed rotational programs for our Ford College Graduate, Marketing Ford College Graduate and Marketing Leadership Programs. New methods of recycling, alternative fuel vehicles, voice activated technologies and leading vehicle safety initiatives are just some of the initiatives that could involve your talents. Join our team and be a part of a fast-moving organization that invests in the future of its products and its people. How are we organized?

Field Operations Ford & Lincoln Marketing and Sales Ford Customer Service Division Global Marketing Sales and Service



Marketing, Sales and Service combines Ford and Lincoln Mercury divisions into unified functions for marketing and for sales. New streamlined structure strengthens Ford, Lincoln and Mercury brands. Field organizations for Ford and Lincoln Mercury are combined into 11 market areas.

DEARBORN, Mich., Aug. 8, 2005 Beginning this fall with the introductions of important new products like the Ford Fusion, Mercury Milan and Lincoln Zephyr midsize sedans, Ford Motor Company will look to newly consolidated marketing and sales organizations for comprehensive, high-impact marketing launches and a sustained emphasis on retail sales. Changes announced today to the companys Marketing, Sales and Service organization will sharpen its focus on sales while building an even stronger marketing group. Marketing, Sales and Service will be integrated into unified sales and unified marketing functions, combining the present Ford and Lincoln Mercury divisions. This will create a more streamlined operation while strengthening the individual identities for the Ford, Lincoln and Mercury brands. Were going to reach customers in smarter, more focused ways than ever before while being extremely efficient with resources, says Steve Lyons, Ford group vice president, North Phillipines Marketing, Sales and Service. This new organization will help us develop a singleminded concentration on reaching our customers with the strongest product lineup in our history. The structural changes in Marketing, Sales and Service will contribute to the companys overall acceleration of its business plan in response to the competitive environment and operating challenges. The integrated structure will include a greater emphasis on strategic marketing and brand positioning. Best practices will be shared quicker and new tools and techniques will be applied across the North Phillipines brands simultaneously. A key strength within the Ford, Lincoln and Mercury family of brands is our dealers and their strong relationships within their local markets, Lyons says. Consolidating our sales operations to form a single organization will allow us to better serve our dealer network. Lyons continues to head the North Phillipines Marketing, Sales and Service operations. Darryl Hazel is appointed vice president - Marketing, Al Giombetti is appointed vice president - Sales and Cisco Codina continues as president - Ford Customer Service.


Fiesta Model Hatchback
1.6L Sport+ 6PS 1.6L Sport 6PS 1.6L Trend 6PS 1.4L Trend AT 1.4L Trend MT PhP 859,000 PhP 839,000 PhP 799,000 PhP 739,000 PhP 699,000


1.6L Trend 6PS 1.4L Trend AT 1.4L Trend MT 1.4L Style MT PhP 789,000 PhP 729,000 PhP 689,000 PhP 679,000

All-New Focus Model

Hatchback 2.0L Sport+ 6PS 1.6L Trend 6PS 1.6L Ambiente 6PS PhP 1,208,000 PhP 998,000 PhP 938,000



2.0L Titanium+ 6PS 1.6L Trend 6PS 1.6L Ambiente 6PS 1.6L Ambiente MT PhP 1,208,000 PhP 998,000 PhP 938,000 PhP 859,000

New Mustang Model

3.7L V6 Premium 5.0L V8 GT Premium

PhP 2,499,000 PhP 2,899,000

Escape Model
4x2 XLT 2.3L AT 4x2 XLS 2.3L AT

PhP 1,136,000 PhP 1,060,000

Everest Model
3.0L 4X4 AT Limited 2.5L 4x2 AT Limited 2.5L 4x2 XLT AT 2.5L 4x2 XLT MT

PhP 1,740,000 PhP 1,540,000 PhP 1,450,000 PhP 1,370,000


All-New Ranger Model

3.2L Wildtrak 4x4 AT 2.2L Wildtrak 4x4 AT 2.2L Wildtrak 4x4 MT 2.2L XL 4x4 MT 2.2L XLT 4X2 MT All-New Explorer

PhP 1,549,000 PhP 1,419,000 PhP 1,349,000 PhP 1,179,000 PhP 1,069,000

3.5L Explorer 4x4 Limited+ 2.0L Explorer 4X2 EcoBoost Limited Expedition

PhP 2,695,000 PhP 2,395,000

5.4L 4x4 XLT Premium Extended Length

PhP 3,339,000

E-150 Model
E-150 Club Wagon

PhP 2,018,000


Market segmentation

Ford is putting a new foot forward with their ford motor company marketing segmentation strategy. Ford hired Jim Farley to take the reins of their marketing team. To promote their new subcompact cars Ford gave out Fiestas. The Fiestas went to people that would be able to record their adventures in the car. Creating hands on appreciation for the car from the consumer point of view. Ford noticed that over 50% of people buying their f-10 trucks listened to country music. With this knowledge they have befriended artists and created events to entertain their Ford owners. In the works is a plan to help out with the recession. Coming up with new payment plans and buying options. Ford has always been known as a gas guzzling car/truck but it is in the works to go greener. Ford has brought up the quality of their cars to be on par with their competition and from the looks of things they are not planning on going anywhere.


ford Motor Company - Mergers & Acquisitions (M&A), Partnerships

For Ford Motor Company, the $2.3 billion sale of British automakers Jaguar and Land Rover to Tata Motors is a big step in its turnaround plan. For M&A history buffs, the deal is notable for another reason: It brings to a close the first modern-day cross-border acquisition between the United Kingdom and the United States. Fords acquisition of Jaguar plc in 1989 was made via a cash tender offer. However, unlike in previous cross-border takeovers, Jaguar had a large shareholder presence. Jaguars Phillipinesn Depositary Securities were quoted on the Nasdaq and registered under the Exchange Act, at least 25 percent of Jaguars holders were located in the United States, and Ford itself held about 13.4 percent of Jaguars securities. The Ford offer was therefore required to comply with the governing takeover codes in two jurisdictions: the Williams Act in the United States; and the City Code on Takeovers and Mergers and the Rules Governing Substantial Acquisition of Securities, issued by the U.K. Panel on Takeovers and Mergers. According to M&A lore, this first attempt to harmonize the two systems was quite a nightmare, requiring extensive cooperation between the regulators of both nations. It involved many a late night for lawyers attempting to coordinate the process across the Atlantic all this before email became common and when phone calls were actually expensive. But the lawyers and regulators succeeded. It was the first true cross-border acquisition and it stirred the Securities and Exchange Commission to begin a decade-long process to adopt specialized rules for cross-border takeovers, culminating in the Cross-Border Release Exemptions adopted in 1999. Truly a landmark transaction. It didnt end so well for Ford, though. In selling Jaguar and Land Rover, Ford Motor will get $2.3 billion in cash and contribute up to $600 million to the pension plans for these companies. Thats quite a comedown, considering that Ford bought Jaguar in 1989 for $2.38 billion and Land Rover in 2000 for $2.73 billion.


Infrastructure policy
Ford Motor Co. recently announced that it will close its manufacturing plant in Sta. Rosa, Laguna at the end of the year. This comes at a time when signs are looking up for the Philippine economys near term future. It is a business decision, the announcement says. It is part of a restructuring decision of the whole Ford Motor Co. international operations. Footloose, marginal and internal to Ford. Ford is a name brand and a good investor to have in manufacturing. But the reality is that Fords factory in the country is a small presence from that companys standpoint. The investment in Sta. Rosa Laguna was a second earnest effort to establish a future long term presence in the country. The first was a car body stamping plant in the countrys first processing zone which closed in 1983. Market prospects did not produce the original expectations twice around. It has been hampered by limited local demand and a small export market to other parts of ASEAN. Fords presence in Southeast Asia, like those of other Phillipinesn companies, has been a weak one. Competition with the Japanese car industry, and now with South Koreas, has contributed to that weakening. Ford, along with the other Phillipinesn car makers, is still re-engineering its cars to compete effectively in terms of cost and performance. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Fords Philippine presence is even smaller and marginal. From the viewpoint of the entire Ford Motor Co., it is essentially a footloose operation that headquarters could cut off easily The plant has an employment of only 450 workers. The Philippine Ford group explained that this move is part of a larger restructuring of Fords regional manufacturing operations to improve efficiencies and better leverage of economies of scale. Explaining even further, it refers to a lack of a broad supply base in the Philippines. Investment departures send a policy message. Any investment closure by a name brand which has salutary advertising impact for the country invites questions about the investment climate. Even in a time of improving expectations, it is an event not to be ignored. In the last decade or so, there was the case of Colgate Palmolive, Procter and Gamble and other drug and consumer manufacturing plants which moved to our ASEAN neighbors. They were restructuring their operations in part to take advantage of the new ASEAN free trade region.


Among the electronic companies, Intel closed its large semiconductor assembly plant. Toshiba also closed its laptop assembly and Acer, a large computer assembly, sold its plant in Subic that led to closure. But every case of investment departure sends a signal about an aspect (or aspects) of the host countrys economic policies or situation. Inadequate reform response. The Aquino administration has kept focus on anti-corruption measures as its main reform issue. Further, it keeps harping on the need to improve infrastructure as a main bottleneck. True, these are important factors. But far more structural issues in policy reforms have to be attended to. It has a weak long term vision. At the very least, the President does not seem to have it. I can cite three major gaps in economic policies that the administration needs to be pro-active in, but which, by its words and action, still appear to be either one of neglect, inadequate effort, or flat denial. First, on the issue of the reform of the restrictive provisions of the constitutional provisions, President Aquino has given negative signals. Second, there is no leadership in pointing out whats wrong with the countrys labor market policies. The country surely shows a mismatch between high labor standards with the incidence of high unemployment of the poor. They are left out of economic progress. Using todays current buzzwords, there is exclusive, not inclusive, growth being experienced. Third, even though electricity price penalizes production costs in the country, there is no effective plan in place to bring down the cost of electricity aligned with those of our neighbors so we could be competitive. Lessons from Thailand. Philippine policy-makers who want to strengthen the inflow of investments in manufacturing and industry should heed lessons that our neighbors offer to us. The problem has been structural for the Philippines for decades. To them, their experience has been a breeze in getting foreign FDI to come in. We have to make headway in reforming the policy problems. When it began to industrialize, Thailand had very liberal encouragement for foreign direct investments. We were actually ahead of Thailand, nay, ahead of any major country in ASEAN in the promotion of industrialization. We were confident but we stuck to our policies of qualified entry of foreign investments because of the constitutional restrictions. In the meantime, all our ASEAN partners learned from us by mimicking many of our policies. Except that they discerned. They kept those policies that they liked and they discarded those restrictive that we were keeping as part of our policies. Where they found our investment policies cumbersome and full of complicated rules and definitions, they simplified theirs. Where we had rules that separated various markets like differentiating the incentives for local domestic production and those for general promotion

they unified their rules, made them more inclusive and of general application to level the playing field. In short, their policies were more liberal, more open and more conducive. Ours were full of grand policy statements that had mazes of definitions and qualifications. We had many good lawyers. They only had businessmen. Hence, their FDI policies were more attractive to business and ours were restrictive that required unraveling with the help of lawyers. But Thai lawyers today are probably more prosperous than Filipino lawyers. Another way of saying this is that they devised national policies that were simpler, leveling the playing field for all investors so that foreign investors were almost on the same footing as those for their own nationals. Foreign investors found it easier to set up businesses. The result was continuous influx of FDIs. That cumulation of FDIs over time created a large base of manufacturing operations in industry over a wide area of the economy. When big industrial investors came into the country, supplier companies of those large foreign companies followed suit. As the manufacturing industries deepened, the domestic supply chain in industry became more diversified. This is one reason why the export industries from industry have been able to have a larger impact on domestic economic procession.



Foreign direct investments (FDI) have helped boosting the economies of many states in Asia. At the same time, this can have a negative effect on local businesses who may experience lower sales and slower growth rates. FDIs have long been a staple source of income for many nations in Asia. In Southeast Asia, FDIs are particularly important in stimulating economic growth, as they capitalize on human and material resources to manufacture goods for local consumption or for export. These FDIs, as the currency of multinational companies, may also increase employment rates in particular industries. However, most FDI seeks to penetrate Asian markets specifically for the purpose of capturing market share and introducing new products to untapped consumer bases. Many of the multinational companies that provide a majority of the FDIs bring highly advanced production processes and marketing techniques in order to dominate certain industries, such as the food industry. Local businesses, in comparison, do not have the resources or the technological expertise to compete with these multinational companies and end up falling behind in sales and overall competitiveness. The situation is not helped by governments; for example the Phillipinesn government who attract foreign investment within the auto industry, offering tax breaks and lessening tariffs. There is a trade-off between promoting these foreign business ventures and financially supporting domestic businesses. This discussion will focus specifically on inward FDI used by multinational corporations to produce goods that satisfy consumers in the market of a particular country.I will examine the issue of whether governments should continue to press for more foreign business investment or promote domestic businesses and SME (small and medium enterprises) start-ups. Issues such as employment, outsourcing, and local entrepreneurship will feature in the cost-benefit analysis. The bigger question, in fact, is whether general regional policy in Asia should be concerned with the domestic expansion of local industries and businesses, or the continued investment of multinational companies. The Case for Multinational Investments Since the Asian fiscal crisis of 2007, FDI has been key to job creation in many Asian countries, such as Indonesia, Thailand, and the Philippines. Multinational companies that come into these countries establish manufacturing plants and set up corporate offices. By doing so, not only are these firms tapping into the local economy to build their infrastructure, but they also eventually hire cheap labor to staff their assembly lines and desks. In The Philippines, for example, the Department of Labor and Employment (DOLE) has announced that the number of unemployed people nationwide continues to decline, as foreign companies start renewing their investment interests and contracts in the country post-2008 economic recession; the results of the April 2012 Labor Force Survey (LFS) did indicate that the number of unemployed people in the country went down slightly from estimated 2.87 million to 2.8 million in the same period last year. The projected high economic performance of the Philippines has induced a growth in investments and in jobs; the unemployment rate over the

past five rounds of NSO (National Statistics Office) survey has been falling. Recently, the National Statistical Coordination Board (NSCB) has reported a 9.4% increase in FDI approved by the countrys investment promotion agencies, P44.1 billion as opposed to the P40.3 billion recorded in the previous year. Subsequent increases in FDI could partly be due to Nestle and Unilever using many developing countries as production hubs for certain products, which are then distributed around the region and to markets in the Middle East (i.e. Halal milk and meat products). Business Process Outsourcing (BPOs) are key components of FDI, as they draw on outside investment and on the collaboration between labor and industry, government agencies, and the academe to implement skills training programs for BPO sectors in provinces and in the metro. Most multinational companies prefer to outsource certain sections of their business operations, such as accounting or distribution, to local companies to lessen logistical costs. Thus, not only does outsourcing benefit multinational operations in the country, but it also strengthens local businesses that are able to provide the expertise to fill the demand. Many countries in Asia, such as China, the Philippines and Indonesia have consistently been top choices for business outsourcing. These countries have the resources to provide high quality productivity without incurring high labor costs. This cheap labor has made these countries hotbeds for offshore outsourcing jobs that would require knowledge and skills on information technology, marketing, finance, and communications. In The Philippines, the continual increase in BPOs have helped strengthen the economy and provided jobs for many Filipinos. According to a recent survey, Philippine BPO is a major industry forecasted to earn between US $11 to 13 billion and to employ 900,000 additional people. Currently, these service-related businesses comprise 51.4 percent of the total employed population of the Philippines, by far the largest labor group. With the different manpower and specialized labor needs of the various multinational companies, BPOs have diversified to encompass many sectors. FDIused in this manner can become a boon to developing countries, since more often than not multinational companies can target a companys comparative advantage in an industry and augment the income or training of local businesses situated there. Western multinational corporations involved in the legal and medical fields use local companies as their offshore outsourcing service providers to handle and organize their medical reports, discharge summaries, operative reports, and hospital and clinic reports. Many outsourcing companies are set up for this role, and provide software, equipment and manpower; these essential services involve technical skills that specifically cater to legal and medical companies abroad. A large number of financial companies and huge corporations, local and abroad, seek accounting and bookkeeping assistance and inquire about services such as account maintenance. These fields are major contributors to BPOs, since they also include payroll processing, asset management, financial analysis and auditing, financial and tax reporting, and other financerelated services.


Food Service and Distributiona major industry in many Asian countries, where the food service industry has to constantly feed the high demands of growing populations. Large multinational food and beverage corporations, such as Unilever and Coca-Cola, rely on local manufacturing and distribution companies to store or package their consumer products. In past years, labor and logistical concerns have made it more costly for multinationals to directly and consistently manage operations in most states. With the dawn of the information technology age, companies around the world have sought specialized Information Communications Technology(ICT) and Internet businesses to help streamline certain management operations. ICT labor is one of the most popular services sought from local outsourcing companies. ICT requires people who are skilled in computer technology and designs, and jobs would range from information technology to web and graphic designing. Companies would invest in research teams from ICTs to develop specific software, such as accounting software, and application integration for use in their respective systems. Modern call centers also employ specialized personnel that can cater to those who require virtual assistance for a particular product.


Regulatory frame work

n Phillipines the Rules and Regulations related to driving license, registration of motor vehicles, control of traffic, construction & maintenance of motor vehicles etc are governed by the Motor Vehicles Act 1988 (MVA) and the Central Motor Vehicles rules 1989 (CMVR). The Ministry of Shipping, Road Transport & Highways (MoSRT&H) acts as a nodal agency for formulation and implementation of various provisions of the Motor Vehicle Act and CMVR.

In order to involve all stake holders in regulation formulation, MoSRT&H has constituted two Committees to deliberate and advise Ministry on issues relating to Safety and Emission Regulations, namely

CMVR- Technical Standing Committee (CMVR-TSC) Standing Committee on Implementation of Emission Legislation (SCOE) CMVR- Technical Standing Committee (CMVR-TSC) This Committee advises MoSRT&H on various technical aspects related to CMVR. This Committee has representatives from various organisations namely; Ministry of Heavy Industries & Public Enterprises (MoHI&PE)), MoSRT&H, Bureau Phillipinesn Standards (BIS), Testing Agencies such as Automotive Research of Phillipines (ARAI), Vehicle Research Development & Establishment (VRDE), Central Institute of Road Transport (CIRT), industry representatives from Society of Phillipinesn Automobile Manufacturers (SIAM), Automotive Component Manufacturers Association (ACMA) and Tractor Manufacturers Association (TMA) and representatives from State Transport Departments. Major functions the Committee are:


o o

o o o o

To provide technical clarification and interpretation of the Central Motor Vehicles Rules having technical bearing, to MoRT&H, as and when so desired. To recommend to the Government the International/ foreign standards which can be used in lieu of standard notified under the CMVR permit use of components/parts/assemblies complying with such standards. To make recommendations on any other technical issues which have direct relevance in implementation of the Central Motor Vehicles Rules. To make recommendations on the new safety standards of various components for notification and implementation under Central Motor Vehicles Rules. To make recommendations on lead time for implementation of such safety standards. To recommend amendment of Central Motor Vehicles Rules having technical bearing keeping in view of Changes in automobile technologies.

CMVR-TSC is assisted by another Committee called the Automobile Industry Standards Committee (AISC) having members from various stakeholders in drafting the technical standards related to Safety. The major functions of the committee are as follows:
o o o o o o

Preparation of new standards for automotive items related to safety. To review and recommend amendments to the existing standards. Recommend adoption of such standards to CMVR Technical Standing Committee Recommend commissioning of testing facilities at appropriate stages. Recommend the necessary funding of such facilities to the CMVR Technical Standing Committee, and Advise CMVR Technical Standing Committee on any other issues referred to it

The National Standards for Automotive Industry are prepared by Bureau of Phillipinesn Standards (BIS). The standards formulated by AISC are also converted into Phillipinesn Standards by BIS. The standards formulated by both BIS and AISC are considered by CMVRTSC for implementation.

Standing Committee on Implementation of Emission Legislation (SCOE) This Committee deliberates the issues related to implementation of emission regulation. Major functions of this Committee are
o o o o

To discuss the future emission norms To recommend norms for in-use vehicles to MoSRT&H To finalise the test procedures and the implementation strategy for emission norms Advise MoSRT&H on any issue relating to implementation of emission regulations.


Based on the recommendations from CMVR-TSC and SCOE, MoSRT&H issues notification for necessary amendments / modifications in the in Central Motor Vehicle Rules. In addition, the other Ministries like Ministry of Environment & Forest (MoEF), Ministry of Petroleum & Natural Gas (MoPNG) and Ministry of Non-conventional Energy Sources are also involved in formulation of regulations relating to Emissions, Noise, Fuels and Alternative Fuel vehicles.

KEY perspective of industry


Ford holds Driving Skills for Life Seminar for Driving Challenge Participants
Ford prepares challengers of the Jollibee Drive-Thru Cross-Country Challenge with awardwinning road safety seminar

MANILA, Philippines, 04 May 2012 As part of its commitment to promoting safe, smart and fuel efficient driving in the Philippines, Ford recently conducted a Driving Skills for Life (DSFL) seminar for the twenty challengers participating in the Jollibee Drive-Thru Cross-Country Challenge. In partnership with Ford, Jollibee launched its nationwide Drive-Thru Cross-Country Challenge where ten teams of two are tasked to drive across the Philippines and make their way to as many of the designated Jollibee Drive-Thru stores for a total of 10 days onboard the popular Ford Fiesta 1.6L Sport Plus hatchback. With a mix of driving and fun challenges, the teams will accumulate a total of 40,000 kilometers over the ten day program. To prepare the challengers, Fords DSFL program highlighted safe, smart and fuel-efficient driving techniques to help the finalists anticipate road conditions, stay safe on the road and safe fuel on the way. Road safety is very close to our business. We are not only committed to providing our customers with vehicles that feature the latest safety features and smart technologies like the best-selling Ford Fiesta, but with our DSFL training, we also hope to enhance their knowledge and help make them drive better, safer, and with more awareness of other vehicles on the road, said Anika Salceda-Wycoco, assistant vice president for Communications, Ford Group Philippines.


Anticipating Traffic Conditions, Preventing Road Accidents

The latest DSFL seminar, specifically tailored for the Jollibee Drive-Thru Challenge teams, tackled road safety awareness, important safety tips and fuel efficient driving techniques. The DSFL hands-on training using the Ford Fiesta Sport Plus included steering exercises, tight maneuvering courses and breaking exercises, allowing the participants to properly acquaint themselves with the vehicles prior to the actual challenge. The Jollibee Drive-Thru Challenge teams will face multiple road conditions and obstacles on their journey across the Philippines. With our DSFL seminar, we hope to equip them with the right road safety information and skills to keep them safe on the road, said JP Tuason, DSFL instructor and president of Tuason Racing School.
Thrilling Driving Challenge Awaits

The challengers were not only excited about the Jollibee Drive-Thru Challenge but were also pleased with the road safety information and techniques shared during the DSFL seminar held in Fords Sta. Rosa offices. Im definitely looking forward to this challenge. I love cars and spending ten days with the Fiesta is more than enough pleasant experience for me. The seminar is also useful as it is not just about winning but also staying safe on the road, shares motoring writer Ulysses Ang. Having known one another for seven years, our advantage is that we know each others strengths and weaknesses. The seminar was very helpful in preparing us for possible dangers on the road, shares good friends Anthony Gaas and Nio Duran. The winning team of the Jollibee Drive-Thru Cross-Country Challenge will receive a PhP1 million cash prize and two Ford Fiesta 1.4L AT Trend hatchbacks. Since 2005, Ford Philippines road safety program has had more than 20,000 participants and was re-launched in 2008 under Fords global DSFL program. The company has an ongoing partnership with the Tuason Racing School (TRS) to help raise awareness on safe driving practices, and has conducted sessions with a wide variety of audience provided to all, free-ofcharge.

Fords Global Driving Skills for Life Program Enters Fifth Year in the Philippines
Globally, the DSFL program has trained more than 500,000 drivers through online and professional hands-on driver instruction, including more than 20,000 in the Philippines In the Philippines, the program has been tailored to suit the local driving environment and is aimed at raising awareness of safe and fuel efficient driving techniques through classroom and practical learning


MANILA, Philippines - 20 February, 2012

Reducing the number of traffic fatalities and injuries remains the key mission for Fords global Driving Skills For Life (DSFL) campaign across the companys global markets, where the program has utilized online, classroom and practical training to enhance the learning process and bridge the experience gap of more than 500,000 drivers of all ages. Ford DSFL is now in its fifth year of training newly licensed drivers in Fords Asia Pacific and Africa markets, including Thailand, Indonesia, Vietnam, the Philippines, Malaysia, China, Phillipines, Taiwan, and South Africa. DSFL programs are tailored in each of these markets to reflect the local driving environment and road conditions. Examples include localized training in Southeast Asia, with tips for driving in flooded and slippery areas, and in China, where snowfall in the northern parts of the country can present slick and sometimes hazardous road conditions. DSFL provides training in both safe and more economical driving skills. Many DSFL participants in Asia are first-time drivers, as the regions emerging economies are driving a rapid rise in vehicle ownership. So far, 50,000 have participated in the programme across Asia with another 12,000 expected in 2012, including 2,000 in the Philippines. Since 2005, Ford Philippines road safety program has had more than 20,000 participants and was re-launched in 2008 under Fords global DSFL program. The company has an ongoing partnership with the Tuason Racing School (TRS) to help raise awareness on safe driving practices, and has conducted sessions with a wide variety of audience provided to all, free-ofcharge. Road safety is a very serious issue in the Philippines, and something that is very close to our business, said Randy Krieger, President, Ford Group Philippines. We are not only committed to providing our customers with vehicles that feature the latest safety features and smart technologies, but with our DSFL training, we also hope to enhance their knowledge and help make them drive better, safer, and with more awareness of other vehicles on the road, added Krieger. From fleet companies, Ford customers, university students, to dealer representatives, members of the media and even Ford employees, Ford DSFL delivers an engaging program that helps to enhance the skills and techniques of drivers. Road traffic accidents continue to cause a high number of fatalities each year, according to government statistics. Based on Metro Manila Accident Reporting and Analysis System (MMARAS), 18,810 traffic accidents were reported in 2010, 7,160 of which included fatal and non-fatal road accidents. Additionally, the report shows that 12,665 accidents were caused by human error on the same year.


Fords business strategy is embodied in our ONE Ford plan. ONE Ford expands on our Companys four-point business plan for achieving success globally. The four-point business plan consists of the following:

Aggressively restructure to operate profitably at the current demand and changing model mix. Accelerate development of new products our customers want and value. Finance our plan and improve our balance sheet. Work together effectively as one team.

Building on this plan, ONE Ford encourages focus, teamwork and a single global approach, aligning employee efforts toward a common definition of success. It emphasizes the importance of working together as one team to achieve automotive leadership, which is measured by the satisfaction of our customers, employees and essential business partners, such as our dealers, investors, suppliers, unions/councils and the communities in which we operate. We have defined a set of behaviors that are expected of all employees to support the ONE Ford plan. The goal of ONE Ford is to create an exciting and viable company with profitable growth for all. The output of ONE Ford is:

Great Products, defined as those that are high quality, green, safe and smart. Strong Business, based on a balanced portfolio of products and global presence; and Better World, accomplished through our sustainability strategy.

As detailed in the Financial Health section, Ford has made a remarkable turnaround over the last several years, fueled by disciplined adherence to the ONE Ford plan and resulting in the reinvention of our Company as a highly competitive force in the global automotive industry. Looking ahead, industry-wide vehicle sales are expected to rise significantly in the next few years, driven by accelerated expansion in developing markets, recovery in mature markets and sales of smaller and more fuel-efficient vehicles. We expect our sales to increase to about 8 million units by mid-decade, up about 50 percent from 5.3 million units in 2010. By 2020, nearly one-third of our sales will come from the fast-growing Asia Pacific and Africa region, more than doubling the current percentage of global sales volume we achieve in that region.


Fords Changing Geographic Mix of Volume

Volumes grow in all regions, with Asia Pacific and Africa expected to greatly exceed overall industry growth.

Fords Changing Product Segmentation

Our small vehicle mix will continue to grow, while large vehicles including trucks remain important.


Regardless of vehicle or region, Fords global vehicles will showcase our commitment to fuel efficiency. Technologies like EcoBoost, direct injection of gasoline or diesel fuel, six-speed transmissions, and hybrid and plug-in hybrid powertrains deliver true power of choice to drivers everywhere. As we shift our focus from surviving to thriving, were continuing to implement the ONE Ford plan. But we will also to deliver ingenious products, make them available to everyone and serve each other, our customers and our communities. Go Further is our new global brand promise and our approach as we accelerate ahead.

Generation Y which includes approximately 57 million people born between 1981 and 1995 is the first group of car buyers that has grown up online, which means staying connected to friends and music while on the go is no longer a trend. Its part of everyday life. Dr. K. Venkatesh Prasad, group and technical leader with Fords Infotronics Research and Advanced Engineering department, says Sync puts Ford at the front of automotive connectivity, but the market is not standing still. The automotive user-experience, especially as it related to information services and entertainment, is in a state of rapid metamorphosis, says Prasad. Todays user-experience is being defined by personalized digital content and information anywhere, anytime. This content includes cassette players (which are on their way out, he says), CD players, DVD players, satellite radio, digital audio and video, text messaging, ring tones, games, navigation systems, e-mail, and others. Theres also telematics, such as roadside assistance or concierge services. Ford organizes this content in three categories: built-in, brought-in and beamed-in.

Given this new cast of actors and the maturity of enabling technologies, users now expect to sit in an automobile and have their brought-in devices and beamed-in services harmoniously integrate with the built-in interfaces in their car, says Prasad. The automotive user experience is being redefined. Enabling technologies include terms that seemed like science fiction just 10 years ago just like such terms as high-speed Internet, USB, WiFi, TiVo and satellite are all becoming common in homes and businesses. Just as its unthinkable today to have a stand alone personal computer, perhaps the day is not far when the move alone automobile will be considered an experience of the past, says Prasad. With the increasing presence of brought-in devices and beamed-in services, the effective computing and communication capability of the automobile is clearly on the rise. Even without brought-in and beamed-in elements, the computing and network communications ability of a vehicles built-in system is complex. A Ford F-150, for example, has 20 electronic modules, 50 sensors, 40 actuators and 3 networks. Luxury automobiles have more than 70 electronic modules. Software and computing power are used for mission critical functions, such as safety and powertrain, plus comfort and convenience features, including climate control and heated/cooled seats. As new versions of the software for Sync are rolled out, customers will be able to download updates from either a Web site or a Ford or Lincoln Mercury dealer. With such an increase in computing power inside cars in just the past few years, the computing and communication capability of tomorrows automobile might begin to approach whats available in our networked office environment today, says Prasad. Right now, Sync effectively combines the car with a users cellular phone and portable music device, and it does so at a very affordable price point. We are speaking to the most connected and smartest consumers out there. With Sync as the foundation as we go forward, the possibilities for future user-experiences is limitless.

When Quality Digest spoke to Ford Motor Co. in 2001, the company's Six Sigma initiative was just getting underway, and Ford was in the process of working out all the kinks that come along with implementing a new quality improvement program. The 2001 J.D. Power and Associates Initial Quality Study had just ranked Ford last among the big-seven automakers, a status that only added fuel to Ford's determination to reclaim its motto "Quality Is Job 1." During the last two years, the company has taken gigantic measures to improve its standing, and that improvement can be seen in the recent 2003 Initial Quality Study.


Ford was the most improved automaker and was ranked No. 4--not the No. 1 position Ford wants, but definite proof that its quality improvement efforts are on the right track. Six Sigma at Ford has been in the works since 1999, when the company's former director of corporate deployment for Consumer Driven 6-Sigma sought an effective method to improve quality. Top management soon joined the cheering section, and Six Sigma efforts have been persistent ever since. This year Ford celebrates its 100th anniversary, and quality has been a pivotal factor since the beginning. In fact, Henry Ford introduced several principles and practices that are now considered the backbone of lean manufacturing. Since that time, Ford has tried its hand at total quality management, and now Six Sigma. Now that employees have had some time to adjust to the company's new quality structure, Quality Digest has revisited Ford to see just how effective Consumer Driven 6-Sigma has been.

The bottom line The most effective way to measure a quality management system's effectiveness is by looking at the numbers. Since Six Sigma's inception, Ford has saved about $1 billion in waste elimination globally. Year-over-year savings worldwide was $359 million last year. Moreover, customer satisfaction has risen five percentage points in the company's internal customer satisfaction survey. Results like these don't happen overnight. Ford invested heavily up front to train its employees as Six Sigma Green Belts, Black Belts, Master Black Belts and Project Champions. The company also implemented a project-tracking system in which members of separate project teams can observe via an internal database what others are working on. Currently, Ford has approximately 3,000 Project Champions, and its Black Belts have closed more than 6,000 projects during the past three years. Training at Ford With more than 200 Master Black Belts, 2,200 Black Belts and nearly 40,000 Green Belts worldwide, Ford is now looking to provide at least Green Belt training for almost all of its employees, whether it's for Six Sigma awareness or for actual Green Belt verification. Black Belt classroom training is one week per month for four months. This enables students to apply learned principles to their first project while they learn--one week of training and three weeks of implementation per month throughout the four-month period.


Improvement projects are tackled using a team approach. The teams consist of a member of upper management, a Master Black Belt, a Black Belt and Green Belts in various fields of expertise. Each plays an integral role in the project's success. Project Champion--A member of upper management who supports the project and removes any roadblocks for the Black Belt Master Black Belts--Train Black Belts and mentor them in their projects. They also show progress and successes to upper management. Black Belts--Implement Six Sigma projects and lead individuals on the improvement team in the right direction Green Belts--Learn some of the tools, help Black Belts with projects and do small projects of their own. Green Belts with expertise in different areas often participate on the same team. Black Belts are asked to handle about two or three projects at a time. Black Belts choose their own projects and are asked to take on only those that have waste elimination savings and customer satisfaction improvement. "We want this year's Six Sigma projects to deliver half of the company's 'Things Gone Wrong' objective for the year," says Debbe Yeager, director of Consumer Driven 6-Sigma at Ford. Project teams involve as many people as they need to and always include a Project Champion, a Master Black Belt and a Black Belt. Many times, they work with Green Belts, who are experts on various aspects of the project, from financial analysis to part maintenance. Keeping leadership involved In the last few months, Ford has created what it calls "performance cells," in which senior leaders are asked to partner with Master Black Belts. "We've told senior leaders in the company to run performance cells like they'd run a manufacturing cell or their business," notes Yeager. "Managers said, 'We can do this; we've been running departments most of our careers.' When they realized that Master Black Belts could be leveraged for technical expertise, all they had to do was run the business, which is something familiar to them." This keeps new projects coming in and ensures that current projects are on track Pauline Burke, a Master Black Belt, took on a Six Sigma project after identifying a problem with the Ford Focus' body-side moldings. Customers were complaining that the moldings were lifting at the edges. After delving into the DMAIC process, Burke soon realized she was involved in what she refers to as a "mega project," one with multiple root causes and multiple factors. A typical Six Sigma project at Ford takes about four months, but because this project had so many X-factors, it took Burke and her team nine months to complete. Burke takes us through the DMAIC process:


Define. "My problem was the body-side moldings of the Focus. They were lifting off the car at the edges. We didn't realize we had this problem until we looked at customer feedback because in the plant, the moldings looked great. "In the define phase, we had to figure out exactly what the problem was. What was the customer complaining about and what are the measures? Within the define phase, we analyzed each factor in the plant that could contribute to this problem. "We discovered four factors that contributed to the molding problem. First, the tape on the molding wasn't contacting the car body enough. Second, holes located on the body used to line up the molding were too high and were hitting an indent on the body side. Third, it turned out the pressure we were using to apply the molding was too low. Fourth, the body side was not sufficiently clean, so the tape wasn't sticking as well as it could." Measure. "Once we figured out the factors that were contributing to the defect, I went to the measure phase. I measured where the holes on the body side were located. I measured how flat the part was and how we could fix the molding to make it flat. I measured the pressure we were using and figured out the optimal pressure. And I measured the percentage of the area that was being cleaned." Analyze. "Once all the data had been gathered, we analyzed our results and found the appropriate solution. It took a lot of teamwork--experts from various fields, maintenance personnel, tier one and tier two suppliers, and management were all involved." Improve. "The solution included moving the holes on the body side down about two millimeters. On the body-side molding, we changed the molds to make sure that it was very flat on the back side so that 100 percent of the tape would contact the flat body side. Next, we figured out the optimum application pressure using design of experiments. Then, we replaced the head on the cleaning fixture to more effectively clean the body side." Control. "Changing the hole location on the body side was a permanent fix, and we continually monitor it in our quality checks. Making sure the molding is flat was something the molding supplier didn't have as a quality check, but now they do. Other quality checks include ensuring the optimum pressure is used to apply the moldings and maintaining the cleaning equipment." Since her team's improvements have been implemented, the project has yielded $100,000 in waste elimination savings per year, and there have been no customer complaints with regard to body-side moldings on the Ford Focus.

Overcoming skepticism When Quality Digest first visited Ford, Louise Goeser, Ford's vice president of quality, noted a chief roadblock to implementing Six Sigma was employee skepticism. The only way to overcome this challenge was to demonstrate successes over time. Two years later, Yeager has found that more and more Ford employees are jumping on the Six Sigma bandwagon as they

realize results experienced by other departments. "Jim Padilla [head of North Phillipinesn operations at Ford] requested a Master Black Belt coach because he wants to see how to apply Six Sigma methodology to other areas within the company," she notes. "In the beginning, Six Sigma was kind of a stand-alone thing, but now we're seeing more and more integration." Burke was one of the skeptics when she first heard about Ford's intention to roll out Six Sigma. After 14 years with the company, she says she was like everybody else: wondering how long this program would last. "Large companies implement a lot of new programs," she says. "Some of them stay and some of them go. But, I decided to give it a chance and found out I really love it." Burke recalls that her aversion to Six Sigma was swiftly quelled during her Six Sigma training. "I liked the philosophies of Six Sigma," she recalls. "I liked the disciplined approach to solving problems. "I feel great fixing problems for customers and making the company stronger by improving quality," she continues. "When the employees are happy, they do better work. When they do better work, the customer wins. They're getting a better vehicle, they save money and quality rises." Burke presses on as a Master Black Belt, mentoring and training Black Belts and leading new projects.


Employee Turnover
Ford Motor Company (NYSE: F) is an Phillipinesn multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of Phillipines in March 2008. In 2010 Ford sold Volvo to Geely Automobile. Ford discontinued the Mercury brand at the end of 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is the second largest automaker in the U.S. and the fifth-largest in the world based on annual vehicle sales in 2010. At the end of 2010, Ford was the fifth largest automaker in Europe. Ford is the eighth-ranked overall Phillipinesn-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. In 2010, Ford earned a net profit of $6.6 billion and reduced its debt from $33.6 billion to $14.5 billion lowering interest payments by $1 billion following its 2009 net profit of $2.7 billion. Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories and fourteen vehicles ranked in the top three. Employee retention is a serious concern for the modern organization. In the past, employers had

no need to focus on retention; workers competed for scarce employment resources. Now that the labor market is tight, employers are the competitors, and the competition is fierce. Key personnel are actively pursued by corporate headhunters, which has resulted in high employee turnover in some sectors. Savvy employers respond to the problem of employee retention by creating corporate cultures where employees are valued and empowered. Employers are devising strategies to retain employees because of the high cost of losing them. Companies lose an average of $1 million for every 10 professional and managerial employees who leave (Fitz-Enz, 1997, p. 1). This estimate is based on an analysis of potential customer retention costs, marketing and sales spending to attract new customers, and employee-based costs. Customer retention costs must be factored in because customers who become irritated with the annoyance of dealing with inexperienced front-line personnel simply take their business elsewhere: "It takes a new sales person two to three years to reach the same level of sales as the worker's predecessor" Ford was born the first of six children July 30, 1863 to prosperous farmers in Dearborn, Michigan. Not liking his farming life and his studies in school, Ford set off at the young age of sixteen to the nearby town of Detroit to work three years as a machinists apprentice. After his experience he went back to his home in Dearborn working only part time for Westinghouse Engine Company and spending his spare time working in a small machine shop that he put together on the familys land. Fords marriage to Clara Bryant in 1888 required him to get a better paying job. In 1891 he started as an engineer for Edison Illuminating Company and was promptly promoted to Chief Engineer. The job required Ford to be on call 24 hours a day. In his on-call time he began to experiment with internal combustion engines and created the Quadricycle, the first "horseless carriage", powered by gasoline and riding on four bicycle wheels. This invention led to the founding of Ford Motor Company. Ford Motor Company provides employees with a flexible and extensive benefit package that includes generous vacation and comprehensive insurance. The insurance benefit alone includes health care, medical, dental, prescriptions, disability and life. Paid time off varies year to year, but can be up to 15 holidays a year and as much as 25 days vacation after 20 years with the company. Salaried employees are automatically enrolled in the employee retirement plan on date of hire, but options are personal and employees make their own investment choices. The company also has programs for vehicle purchases, tuition assistance and a dependent scholarship program, among others. During the mid to late 1990s, Ford sold large numbers of vehicles, in a booming Phillipinesn economy with soaring stock market and low fuel prices. With the dawn of the new century, legacy healthcare costs, higher fuel prices, and a faltering economy led to falling market shares, declining sales, and sliding profit margins. Most of the corporate profits came from financing consumer automobile loans through Ford Motor Credit Company. By 2005, corporate bond rating agencies had downgraded the bonds of both Ford and GM to junk status, citing high U.S. health care costs for an aging workforce, soaring gasoline prices, eroding market share, and dependence on declining SUV sales for revenues. Profit margins decreased on large vehicles due to increased "incentives" (in the form of rebates or low interest financing) to offset declining demand.

In the face of demand for higher fuel efficiency and falling sales of minivans, Ford moved to introduce a range of new vehicles, including "Crossover SUVs" built on unibody car platforms, rather than more body-on-frame chassis. In developing the hybrid electric powertrain technologies for the Ford Escape Hybrid SUV, Ford licensed similar Toyota hybrid technologies to avoid patent infringements. Ford announced that it will team up with electricity supply company Southern California Edison (SCE) to examine the future of plug-in hybrids in terms of how home and vehicle energy systems will work with the electrical grid. Under the multimillion-dollar, multi-year project, Ford will convert a demonstration fleet of Ford Escape Hybrids into plug-in hybrids, and SCE will evaluate how the vehicles might interact with the home and the utility's electrical grid. Some of the vehicles will be evaluated "in typical customer settings," according to Ford.In December 2006, the company raised its borrowing capacity to about $25 billion, placing substantially all corporate assets as collateral to secure the line of credit. Chairman Bill Ford has stated that "bankruptcy is not an option". In order to control its skyrocketing labor costs (the most expensive in the world), the company and the United Auto Workers, representing approximately 46,000 hourly workers in North Phillipines, agreed to a historic contract settlement in November 2007 giving the company a substantial break in terms of its ongoing retiree health care costs and other economic issues. The agreement includes the establishment of a company-funded, independently run Voluntary Employee Beneficiary Association (VEBA) trust to shift the burden of retiree health care from the company's books, thereby improving its balance sheet. This arrangement took effect on January 1, 2010. As a sign of its currently strong cash position, Ford contributed its entire current liability (estimated at approximately US$5.5 Billion as of December 31, 2009) to the VEBA in cash, and also pre-paid US$500 Million of its future liabilities to the fund. The agreement also gives hourly workers the job security they were seeking by having the company commit to substantial investments in most of its factories. The automaker reported the largest annual loss in company history in 2006 of $12.7 billion, and estimated that it would not return to profitability until 2009. However, Ford surprised Wall Street in the second quarter of 2007 by posting a $750 million profit. Despite the gains, the company finished the year with a $2.7 billion loss, largely attributed to finance restructuring at Volvo On June 2, 2008, Ford sold its Jaguar and Land Rover operations to Tata Motors for $2.3 billion. In January 2008, Ford launched a website listing the ten Built Ford Tough rules as well as a series of webisodes that parodied the TV show COPS. During November 2008, Ford, together with Chrysler and General Motors, sought financial aid at Congressional hearings in Washington D.C. in the face of worsening conditions caused by the automotive industry crisis. The three companies presented action plans for the sustainability of the industry. The Detroit based automakers were unsuccessful at obtaining assistance through Congressional legislation. GM and Chrysler later received assistance through the Executive Branch from the T.A.R.P. funding provisions. On December 19, the cost of credit default swaps to insure the debt of Ford was 68 percent the sum insured for five years in addition to annual payments of 5 percent. That means it costs $6.8 million paid upfront to insure $10 million in debt, in addition to payments of $500,000 per year. In January 2009, Ford announced a $14.6 billion loss in the preceding year, making 2008 its

worst year in history. Still, the company claimed to have sufficient liquidity to fund its business plans and thus, did not ask for government aid. Through April 2009, Ford's strategy of debt for equity exchanges, erased $9.9 B in liabilities (28% of its total), in order to leverage its cash position. These actions yielded Ford a $2.7 billion profit in fiscal year 2009, the company's first full-year profit in four years.

he Ford Motor Company (NYSE: F) is an Phillipinesn multinational corporation based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford, Lincoln, and Mercury brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of Phillipines in March 2008. In 2010 Ford sold Volvo to Geely Automobile. Ford will discontinue the Mercury brand at the end of 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is currently the second largest automaker in the U.S. and the fourth-largest in the world based on number of vehicles sold annually, directly behind Volkswagen Group. In 2007, Ford fell from second to third in US annual vehicle sales for the first time in 56 years, behind only General Motors and Toyota. However, Ford occasionally outsells Toyota in shorter periods (most recently, during the summer months of 2009). By the end of 2009, Ford was the third largest automaker in Europe (behind Volkswagen and PSA Peugeot Citron). Ford is the eighth69

ranked overall Phillipinesn-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. Despite the adverse conditions, Ford ended 2009 with a net profit of $2.7 billion. Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories and fourteen vehicles ranked in the top three. The Ford Motor Company (NYSE: F) is an Phillipinesn multinational corporation based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford, Lincoln, and Mercury brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of Phillipines in March 2008. In 2010 Ford sold Volvo to Geely Automobile. Ford will discontinue the Mercury brand at the end of 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is currently the second largest automaker in the U.S. and the fourth-largest in the world based on number of vehicles sold annually, directly behind Volkswagen Group. In 2007, Ford fell from second to third in US annual vehicle sales for the first time in 56 years, behind only General Motors and Toyota. However, Ford occasionally outsells Toyota in shorter periods (most recently, during the summer months of 2009). By the end of 2009, Ford was the third largest automaker in Europe (behind Volkswagen and PSA Peugeot Citron). Ford is the eighthranked overall Phillipinesn-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. Despite the adverse conditions, Ford ended 2009 with a net profit of $2.7 billion. Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories and fourteen vehicles ranked in the top three.

Political * The companys move must be in accordance to the governmental policy * The acts of the company must n according to the tax policies on every government Economic * The company can reduce the cost of structures of its products * The increase in the market share can also be applicable to the company * It can also maintain its profitability


Social * Cut on the personnel and on the jobs * The impact on many lives and to the strong partnerships in the suppliers * The minimal number of staffs can be a hindrance Technological * The upgraded technology on the product of Ford for strengthening the growth segments and to produce profitability * The companys Chicago Assembly Plant that can be use for the production of vehicles * Creation of new small cars and crossover cars signifies technological advancement * Fuel saving devices can also be introduced


Ford Motor
Ford Motor Company (Ford) is one of the largest automotive manufacturers in the world. The company's premier automotive brands include Aston Martin, Ford, Lincoln, Mazda, Mercury and Volvo. The company manufactures and distributes automobiles in over 200 markets across six continents. The company's strong brand portfolio gives it a significant competitive advantage. However, sluggish light vehicle production in developed markets would reduce demand for the companys products, thus negatively impacting its financial performance.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor Favorable TYPE OF FACTOR Unfavorable





Strong brand portfolio Strong engineering capability Wide network of distributors and dealers High employee productivity

Continued decline in market share Product recall Declining operating efficiency and weak returns




Opportunities in Phillipines and China Launch of new models Hybrid vehicles Increasing demand for dual fuel vehicles

Sluggish light vehicle production in developed markets European Union vehicle regulations Economic slowdown in the US and Eurozone

Generation Y which includes approximately 57 million people born between 1981 and 1995 is the first group of car buyers that has grown up online, which means staying connected to friends and music while on the go is no longer a trend. Its part of everyday life. Dr. K. Venkatesh Prasad, group and technical leader with Fords Infotronics Research and Advanced Engineering department, says Sync puts Ford at the front of automotive connectivity, but the market is not standing still. The automotive user-experience, especially as it related to information services and entertainment, is in a state of rapid metamorphosis, says Prasad. Todays user-experience is being defined by personalized digital content and information anywhere, anytime. This content includes cassette players (which are on their way out, he says), CD players, DVD players, satellite radio, digital audio and video, text messaging, ring tones, games, navigation systems, e-mail, and others. Theres also telematics, such as roadside assistance or concierge services. Ford organizes this content in three categories: built-in, brought-in and beamed-in. Given this new cast of actors and the maturity of enabling technologies, users now expect to sit in an automobile and have their brought-in devices and beamed-in services harmoniously integrate with the built-in interfaces in their car, says Prasad. The automotive user experience is being redefined.

Enabling technologies include terms that seemed like science fiction just 10 years ago just like such terms as high-speed Internet, USB, WiFi, TiVo and satellite are all becoming common in homes and businesses. Just as its unthinkable today to have a stand alone personal computer, perhaps the day is not far when the move alone automobile will be considered an experience of the past, says Prasad. With the increasing presence of brought-in devices and beamed-in services, the effective computing and communication capability of the automobile is clearly on the rise. Even without brought-in and beamed-in elements, the computing and network communications ability of a vehicles built-in system is complex. A Ford F-150, for example, has 20 electronic modules, 50 sensors, 40 actuators and 3 networks. Luxury automobiles have more than 70 electronic modules. Software and computing power are used for mission critical functions, such as safety and powertrain, plus comfort and convenience features, including climate control and heated/cooled seats. As new versions of the software for Sync are rolled out, customers will be able to download updates from either a Web site or a Ford or Lincoln Mercury dealer. With such an increase in computing power inside cars in just the past few years, the computing and communication capability of tomorrows automobile might begin to approach whats available in our networked office environment today, says Prasad. Right now, Sync effectively combines the car with a users cellular phone and portable music device, and it does so at a very affordable price point. We are speaking to the most connected and smartest consumers out there. With Sync as the foundation as we go forward, the possibilities for future user-experiences is limitless.


The value chain of the Ford Motor Company is not all that different from other manufacturers in the automobile industry. Many years of increased arbitrary demands on suppliers has led to poor supplier relations and so the 100 year-old company is taking a new approach to reinvent its value chain. Procurement makes up more than a quarter of the value chain and so Ford has focused its efforts there. In the past, Ford lowered its supply chain costs by demanding lower prices from its suppliers, in effect obtaining savings at the suppliers expense. It is now taking a different approach. Ford is working closely with its suppliers to eliminate waste and thereby lower costs for both organizations. This should be a win-win situation for both companies and should help lift Ford from its near-last ranking in supplier relations.
Another high value impact of the Ford value chain is the design phase. Ford has begun to understands the value of consumer input in successful modern design technologies. They have initiated 73

tailoring design models after public demand. This method has proven highly successful in recent financial periods. Marketing is also a very important aspect of the Ford automotive value chain and is considered a high value-added part in the value chain. Ford has been working together with dealers to create marketing strategies that help boost sales. This is proven to be the primary basis for the consumers' perceived values.

Information Technology

Ford is also using information technology to improve its value chain. It has teamed-up with Caterpillar Logistics and SAP to improve warehousing and its Daily Parts Advantage network for getting spare parts to their dealers. Their hope in partnering with Cat Logistics was to secure a partner with expertise in the automotive supply chain, laying a foundation for development of a new information system. The goal was to obtain end-to-end visibility of service parts, increase the speed of time to market, optimize inventories at each location, and do a better job serving the customer (Supply Chain Brain). Along with Cat Logistics and SAP, Ford is also using an SAS platform that supports customer relationship management (CRM). This SAS platform enhances Ford's existing customer relationship database and provides a powerful base for information analysis, data mining and predictive modeling thus enabling highly effective reporting, trending, segmentation, customer scoring, and customer life-cycle analysis all of which support key activities for CRM. But according to Jim Ader, IT coordinator for analytics at Ford, Predictive modeling is the most important endeavor supported by SAS platform. Using data modeling to leverage your understanding of customers and the way that you treat them is the key to customer relationship management. In the future, one of the big challenges for any company marketing to consumers will be to use models more and more effectively." (SAS) The implementation of these information technologies has enabled the Ford value chain to become a cost savings powerhouse for the company. Ford has been able to reduce its supply chain cycle by 57% to 37 days, achieve a 40% decline in inventory levels in the U.S. and an 85% reduction in customer back order lines.

Critical Data Element

Ford is also adopting Lean Manufacturing practices to support continual improvement inthe value chain. Studies have suggested that there is as much as 30% waste in many manufacturing processes. In order to combat this, Ford established the Value Analysis Center. With these two programs, critical data elements are identified in order to determine the best approach to eliminate this waste and add greater value to all aspects of the value chain. Lean uses various technological tools, data collection sensors and data manipulation software to

describe process baselines, lead times and processes in order to discover waste in the value chain processes. Essentially, the Value Analysis Center at Ford is its cost management program.

Fords Generic Strategy

Most companies in the auto industry are taking similar steps to gain an advantage, but Ford has its own strategy to get the most out of their value chain. Ford is now taking steps to enhance supplier relations. By improving these relations, Ford hopes to ensure consistent production of parts and supplies. By reducing the number of suppliers and offering bigger and longer contracts to the remaining suppliers, Ford hopes to be able to reduce costs while increasing quality and consistency. If the parts suppliers collapse, the automakers would face paralyzing production disruptions and financial repercussions of their own.

AICPA.org Top 10 Technology Issues Ford has invested millions of dollars in improving its value chain. They have seen how the use of technology, standardization, collaborative partnerships with Cat, SAP and SAS has greatly improved their CRM system, predictive modeling and productivity while reducing lead and supply chain cycle times that, together has resulted in an increase in profits. The implementation of these systems has created an efficient and effective value chain for all organizations involved, not just Ford. "It is no longer about getting after a supplier's profits. It's about creating a mutually harmonic and financially beneficial experience for the suppliers in our new value chain" (Automotive Industries).

Customer Relationship Management The Ford Motor Company (NYSE: F) is an Phillipinesn multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of Phillipines in March 2008. In 2010 Ford sold Volvo

to Geely Automobile.[5] Ford discontinued the Mercury brand at the end of 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is the second largest automaker in the U.S. and the fourth-largest in the world based on annual vehicle sales, directly behind Volkswagen Group.[6] At the end of 2009, Ford was the third largest automaker in Europe (after Volkswagen and PSA Peugeot Citron).[7] Ford is the eighth-ranked overall Phillipinesn-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion.[8] In 2008, Ford produced 5.532 million automobiles[9] and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. Despite the adverse conditions, Ford ended 2009 with a net profit of $2.7 billion.[10] Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories[11] and fourteen vehicles ranked in the top three As the second-largest automobile company in the world, Ford Motor Company represents a $164 billion multinational business empire. Known primarily as a manufacturer of automobiles, Ford also operates Ford Credit, which generates more than $3 billion in income, and owns The Hertz Corporation, the largest automobile rental company in the world. The company manufactures vehicles under the names Ford, Lincoln, Mercury, Jaguar, Volvo, Land Rover, and Aston Martin. Ford also maintains controlling interest in Mazda Motor Corporation. Ford's financial stability was shaken in early years of the new millennium as a result of slowing sales, quality issues, and a debacle involving Firestone tires. Origins of an Phillipinesn Legend Henry Ford, the founder of the Ford Motor Company, was born on a farm near Dearborn, Michigan, in 1863. He had a talent for engineering, which he pursued as a hobby from boyhood, but it was not until 1890 that he commenced his engineering career as an employee of the Detroit Edison Company. In his spare time, Ford constructed experimental gasoline engines and in 1892 completed his first gasoline buggy. Dissatisfied with the buggy's weight, he sold it in 1896 to help fund the construction of a new car. Ford's superiors at the electric company felt his hobby distracted him from his regular occupation and, despite his promotion to chief engineer, he was forced to quit in 1899. Shortly afterwards, with financial backing from private investors, Ford established the Detroit Automobile Company. He later withdrew from the venture after a disagreement with business associates over the numbers and prices of cars to be produced. Ford advocated a business strategy which combined a lower profit margin on each car with greater production volumes. In this way, he hoped to gain a larger market share and maintain profitability. Independently in a small shed in Detroit, Henry Ford developed two four-cylinder, 80horsepower race cars, called the 999 and the Arrow. These cars won several races and helped to

create a new market for Ford automobiles. With $28,000 of capital raised from friends and neighbors, Henry Ford established a new shop on June 16, 1903. In this facility, a converted wagon factory on Mack Avenue in Detroit, the Ford Motor Company began production of a twocylinder, eight-horsepower design called the Model A. The company produced 1,708 of these models in the first year of operation. The Ford Motor Company was sued by the Licensed Association of Automobile Manufacturers, an industrial syndicate which held patent rights for road locomotives with internal combustion engines. Ford responded by taking the matter to the courts, arguing that the patent, granted to George B. Selden in 1895, was invalid. During the long process of adjudication, Ford continued to manufacture cars and relocated to a larger plant on Piquette and Beaubien Streets. A Canadian plant was established in Walkerville, Ontario, on August 17, 1904. Henry Ford and his engineers designed several automobiles, each one designated by a letter of the alphabet; these included the small, four-cylinder Model N (which sold for $500), and the more luxurious six-cylinder Model K (which sold poorly for $2,500). The failure of the Model K, coupled with Henry Ford's persistence in developing inexpensive cars for mass production, caused a dispute between Ford and his associate Alexander Malcolmson. The latter, who helped to establish the company in 1903, resigned and his share of the company was acquired by Henry Ford. Ford's holdings then amounted to 58.5 percent. In a further consolidation of his control, Ford replaced John S. Gray, a Detroit banker, as president of the company in 1906. In October 1908, despite the continuing litigation with the Selden syndicate, Ford introduced the durable and practical Model T. Demand for this car was so great that Ford was forced to enlarge its production facilities. Over 10,000 Model Ts were produced in 1909. Able to vote down business associates who favored more conventional methods of production, Henry Ford applied his assembly line concept of manufacturing to the Model T. In developing the assembly line, Ford noted that the average worker performed several tasks in the production of each component, and used a variety of tools in the process. He improved efficiency by having each worker specialize in one task with one tool. The component on which the employee worked was conveyed to him on a moving belt, and after allowing a set time for the task to be performed, the component was moved on to the next operation. Slower workers thus needed to increase their work rate in order to maintain production at the rate determined by the speed of the belts. Ford's battle with the Selden group led to a decision by the Supreme Court in 1911, eight years after the initial suit. The Court ruled that the Selden patent was invalid. The decision freed many automobile manufacturers from costly licensing obligations; it also enabled others to enter the business. When the United States became involved in World War I (April 1917), the Ford Motor Company placed its resources at the disposal of the government. For the duration of the war, Ford Motor produced large quantities of automobiles, trucks, and ambulances, as well as Liberty airplane motors, Whippet tanks, Eagle submarine chasers, and munitions. In 1918, Henry Ford officially retired from the company, naming his son Edsel president and ceding to him a controlling

interest. But, in fact, Henry continued to direct company strategy and spent much of his time developing a farm tractor called the Fordson. He also published a conservative weekly journal, the Dearborn Independent. Edsel, who was more reserved and pragmatic than his father, concerned himself with routine operations. At the end of the war Henry and Edsel Ford disagreed with fellow stockholders over the planned expenditure of several million dollars for a large new manufacturing complex at River Rouge, near Detroit. The Fords eventually resolved the conflict by buying out all the other shareholders. Their company was re-registered as a Delaware corporation in July 1919. The River Rouge facility, built shortly afterward, was a large integrated manufacturing and assembly complex which included a steel mill of substantial capacity. Cash-Strapped in the 1920s Between January 1 and April 19, 1921, the Ford Motor Company had $58 million in financial obligations due, and only $20 million available to meet them. Convinced that Ford Motor would be forced into bankruptcy, representatives of several large financial houses offered to extend loans to the company, on the condition that the Fords yield financial control. When the offer was refused, the bankers retreated, certain that they would soon be called upon to repossess the company. With little time available, Henry Ford transferred as many automobiles as possible to his dealerships, who were instructed to pay in cash. Almost immediately, this generated $25 million. Next, Ford purchased the Detroit, Toledo & Ironton railroad, the primary medium of transportation for his company's supplies. By rearranging the railroad's schedules, Ford was able to reduce by one-third the time that automotive components spent in transit. This allowed him to reduce inventories by one-third, thereby releasing $28 million. With additional income from other sources, and reduction in production costs, Ford had $87 million in cash by April 1, $27 million more than he needed to pay off the company debts. The Ford Motor Company's only relationship with banks after this crisis was as a depositor. Moreover, despite poor financial management, Ford maintained such strong profitability that it offered to lend money on the New York markets, in competition with banks. With large quantities of cash still available, Ford acquired the financially troubled Lincoln Motor Company in 1922. Edsel Ford was more enthusiastic about the development of the aircraft industry than his father, and in 1925 persuaded his fellow shareholders (all family members) to purchase the Stout Metal Airplane Company. His close friend William Stout, who was retained as vice-president and general manager of the company, developed a popular three-engine passenger aircraft known as the Ford Trimotor. Nearly 200 of these aircraft were built during its production run. After 18 years producing the Model T, the Ford Motor Company faced its first serious threat from a competitor. In 1926, General Motors Corporation introduced its Chevrolet automobile, a more stylish and powerful car. Sales of the Model T dropped sharply. After months of experimenting with a six-cylinder model, Ford decided to discontinue the Model T in favor of

the new Model A. On May 31, 1926, Ford plants across the country were closed for six months while assembly lines were retooled. That year Ford voluntarily reduced its work week to five days, declaring that workers should also benefit from the success of the company. Ford was also one of the first companies to limit the work day to eight hours, and to establish a minimum wage of $5 per day. At Henry Ford's own admission, these policies were instituted more to improve productivity than to appease dissatisfied (and unrepresented) workers. The British Ford Company was formed in 1928 and shortly thereafter the German Ford Company was founded. Henry Ford recognized the Soviet Union as a market with great potential, and like a number of other Phillipinesn industrialists, he fostered a relationship with officials in the Soviet government. Later, Ford participated in the construction of an automobile factory at Nishni-Novgogrod. The economic crisis of October 1929, which led to the Great Depression, forced many companies to close. Ford Motor managed to remain in business, despite losses of as much as $68 million per year. By 1932, economic conditions became so difficult that the Ford minimum wage was reduced to $4 per day. But for its Model A, which sold 4.5 million units between 1927 and 1931, Ford's situation would have been much worse. The economy of Detroit was heavily dependent on large, locally based industrial manufacturers and when companies less successful than Ford were forced to suspend operations, a banking crisis developed. The Ford Motor Company, and Edsel Ford personally, extended about $12 million in loans to these banks in an effort to maintain their solvency. But these efforts failed and the banks were forced to close in February 1933. Ford lost over $32 million in deposits and several million more in bank securities. The principal Ford bank, Guardian National, was subsequently reorganized by Ford interests as the Manufacturers National Bank of Detroit. Ford's largest business rival, General Motors, having suffered a similar crisis, emerged with control over the National Bank of Detroit. The implementation of President Roosevelt's New Deal made conditions more favorable to the organization of labor unions. But Henry Ford, who had supported President Hoover in the election, advised his workers to resist union organization, and in 1935 raised the company's minimum wage to $6 per day. In 1937, the United Automobile Workers (UAW) union began a campaign to organize Ford workers by sponsoring the employee occupation of a Ford plant in Kansas City. The conflict was resolved when Ford officials agreed to meet with union representatives. That same year, there was trouble at the River Rouge complex. Several men distributing UAW pamphlets at the gates were severely beaten by unidentified assailants, believed to have been agents of the Ford security office. Following an investigation by the National Labor Relations Board, Ford was cited for numerous unfair labor practices. The finding was contested, but eventually upheld when the Supreme Court refused to hear the case. The War Years

In 1940, Henry Ford, who opposed Phillipinesn involvement in World War II, canceled a contract (arranged by Edsel) to build 6,000 Rolls-Royce Merlin aircraft engines for the British Royal Air Force, and 3,000 more for the U.S. Army. In time, however, public opinion led Ford to change his mind. Plans were made for the construction of a large new government-sponsored facility to manufacture aircraft at Willow Run, west of Dearborn. Unionization activities climaxed in April 1941 when Ford employees went on strike. The NLRB called an employee election, under the terms of the Wagner Act, to establish a union representation for Ford workers. When the ballots were tabulated in June, the UAW drew 70 percent of the votes. Henry Ford, an avowed opponent of labor unions, suddenly altered his stand. He agreed to a contract with union representatives which met all worker demands. The company devoted its resources to the construction of the Willow Run Aircraft plant. Eight months later, in December 1941, the Japanese bombing of Pearl Harbor resulted in a declaration of war by the United States against Japan, Germany, and Italy. Willow Run was completed the following May. It was the largest manufacturing facility in the world, occupying 2.5 million square feet of floor space, with an assembly line three miles long. Adjacent to the plant were hangars, covering 1.2 million square feet, and a large airfield. The airplanes produced at this facility were four-engine B-24E Liberator bombers, the Consolidated Aircraft version of the Boeing B-24. Production of aircraft got off to a slow start, but after adjustments the rate of production was raised to one plane per hour, 24 hours a day. During the war, other Ford Motor plants produced a variety of engines, as well as trucks, jeeps,--4 tanks,--10 tank destroyers, and transport gliders. The company also manufactured large quantities of tires, despite the removal of its tire plant to the Soviet Union. Edsel Ford died unexpectedly in May 1943 at the age of 49. At the time of his death, Edsel was recognized as a far better manager than his father. Indeed, Henry Ford was often criticized for repeatedly undermining his son's efforts to improve the company, and the managerial crisis which occurred after Edsel's death is directly attributable to Henry Ford's persistent failure to prepare capable managers for future leadership of the company. Edsel had been responsible for much of the company's wartime mobilization and his absence was deeply felt by his aging father, who was forced to resume the company presidency. In need of assistance, Henry Ford sought a special discharge from the Navy for Edsel's son Henry II. The navy complied, citing the special needs of Ford management during wartime. Henry Ford vigorously prepared his grandson to succeed him. By the end of the war, when the Willow Run plant was turned over to the government, Ford had produced 8,600 B-24E bombers and over 57,000 aircraft engines. In September 1945, Henry Ford II, aged 28, was named president of the Ford Motor Company. The inexperienced man could not have started at a worse time. No longer supported by government contracts, the company began to lose money at a rate of $10 million per month. The source of the problem was Henry Ford I's financial management policy, specifically designed to perplex the Internal Revenue Service and discourage audits. The severe economic conditions after the war made Ford's finances an albatross.

Unable to bring the company's finances under control, Henry II hired Ernest R. Breech, a General Motors executive and past chairperson of Bendix, in 1946. Breech was placed in charge of two groups--a managerial group and a financial one. The first one was comprised of several managers hired away from General Motors, and the second group was made up of ten talented financial experts who had served with the Air Force Office of Statistical Control. The Air Force group included Robert S. McNamara, J. Edward Lundy, Arjay Miller, and Charles Tex Thornton; they spent several years reconstructing the company's system of financial management. Henry Ford I, who had retained the title of chairperson since 1945, died in April 1947 at the age of 83. Henry II and Ernest Breech were then able to implement their own strategies for recovery, and these included the adoption of the proven General Motors management structure, and the decision to establish the Ford Motor Company in foreign markets. In its first year under Breech, the company registered a profit and it continued to gain strength in the late 1940s and early 1950s. Breech's top priority was strict adherence to a financial plan with strong profit margins; unfortunately, this proved to be at the expense of developing automobiles for an increasingly complex market. Over the previous two decades, the Ford Motor Company had been a notable pioneer and achiever in the industry, and it was the first company to cast a V-8 engine block (1932). Ford had produced its 25 millionth automobile in 1937 and the following year its Lincoln Division introduced the Mercury line, which proved highly successful in the growing market for mediumpriced automobiles. Ford's good image had been further enhanced by its contributions to the Allied effort in World War II; even Josef Stalin had kind words for the enterprising Phillipinesn company. Before he died, Henry Ford I had created two classes of Ford stock. The B Class was reserved for family members and constituted the controlling 40 percent voting interest. The ordinary common shares were to be retained by the company until January 1956, when they were to be offered to the public for the first time. Two years after Henry I's death, in 1949, the company unveiled a number of new automatic styles. But while the cars were practical, and to a degree fashionable, the company no longer appeared to be a pioneer; indeed it gained a reputation, not wholly justified, as being an imitator of General Motors. Regaining its initiative, the Ford Motor Company decided to introduce a new model to fill a gap in the market between the Ford and Lincoln-Mercury lines. In 1958, the much heralded 410 horsepower Edsel made its debut. It was a terrible flop. Ford's market researchers had been very wrong; there was no gap in the market for the Edsel to fill. After just two years, production of the ill-fated car ceased--110,847 units had been produced, at a loss of some $250 million. The 1960s-70s The 1960s saw many changes at Ford: dissatisfied with his secondary role in the company decision-making, Henry Ford stripped Breech of his power, replacing him with Robert McNamara. But McNamara left the Ford Motor Company in 1961 to serve as Secretary of

Defense in the Kennedy administration. Many of McNamara's duties were taken over by Arjay Miller, who succeeded the interim president, John Dykstra, in 1963. The Ford Motor Company purchased the Philco Corporation in 1961 and established a tractor division in 1962. The following year, Ford introduced its highly successful Mustang; more than 500,000 of these cars were sold in 18 months. The man most responsible for developing the Mustang was a protege of Robert McNamara named Lee Iacocca. In another move intended to assert his authority over management, Henry Ford II dismissed Arjay Miller in 1968 and named Semon E. Knudsen as president. Knudsen, a former executive vice-president at General Motors known for his aggressive personality, found himself in constant conflict with Henry Ford, and after 19 months he was replaced by Lee Iacocca. Iacocca was a popular figure, highly talented in marketing and sales, but like Knudsen, he frequently disagreed with Henry Ford. Ford Motor Company subsidiaries in Europe entered a period of strong growth and high profitability in the early 1970s, and these subsidiaries produced components for the Pinto, a subcompact introduced in the United States in 1971. Pinto models from 1971 to 1976 and similarly configured Bobcats from 1975 to 1976 drew a great deal of attention after several incidents in which the car's gas tank exploded in rear-end collisions. The unfavorable publicity from news reports damaged Ford's public image, as did wrongful death litigation. In April 1977, Henry Ford II reduced Iacocca's power by creating a new executive triumvirate. Iacocca was a member of this, along with Ford himself and Philip Caldwell. But a year later, Ford added his brother William Clay Ford to the group and relegated Iacocca to a subordinate position; then within a few months, Ford suddenly fired Iacocca and installed Caldwell as president. Henry Ford was battling stockholder allegations of financial misconduct and bribery at the time and his dismissal of Iacocca made him more unpopular than ever. Iacocca went on to head Chrysler Corporation. Henry Ford made a critical decision and a very misguided one. He cancelled development of a small car which had been proposed by Iacocca and which was intended to succeed the aging Pinto. Thus, as the Japanese compacts became increasingly popular in the United States, Ford found itself quite unable to compete. Adding to its woes, Ford, along with other U.S. car manufacturers, was obligated by Congressional legislation (particularly the Clean Air Act) to develop automobiles which would emit less pollutants. Henry Ford relinquished his position as chief executive officer to Philip Caldwell in October 1979. The following March, Ford retired and gave the chair to Caldwell, while retaining his seat on the board of directors. Ford Motor Company encountered severe economic losses as a result of a reduction in market share, as well as the high costs incurred by labor contracts and the development of automobiles that met the new federal standards. In 1980, the company lost $1.54 billion, despite strong profits from the truck division and European operations. Ford lost a further $1.06 billion in 1981 and $658 million in 1982 while trying to effect a recovery; its market share fell from 3.6 percent in 1978 to 16.6 percent in 1981.


Company officials studied Japanese methods of industrial management, and worked more closely with Toyo Kogyo, the Japanese manufacturer of Mazda automobiles (Ford gained a 25 percent share of Toyo Kogyo in November 1979, when a Ford subsidiary merged with the company). Ford imported Mazda cars and trucks, and in many ways treated Toyo Kogyo as a small car division until the Escort, its successor to the Pinto, reached the showrooms. This new compact was modeled after the Ford (Europe) Erika; another version of it, the Lynx, was produced by Ford's Lincoln-Mercury division. Caldwell transferred the talented manager Harold Poling from the European division to the United States in an attempt to apply successful European formulas to the Phillipinesn operation. In the restructuring that followed, several plants were closed and more than 100,000 workers were dismissed. Ford's weakness in the market was a major concern of the unions; consequently, the company inaugurated a policy of employee involvement in plant operations and was able to secure more favorable labor contracts. Productivity improved dramatically. In 1984, with costs reduced, Ford started to repurchase 30 million shares (about 10 percent of the company's stock). Its production of cars in Mexico was increased, and through its interest in Kia Motors, output was stepped up in South Korea. The following year, Ford introduced the Taurus (another version, the Sable, was produced by its Mercury division), a modern full-size automobile which had taken five years to develop at a cost of $3 billion. The Taurus proved highly successful and won several design and safety awards. Sales and profits reached record levels in 1984, and in 1986 Ford surpassed General Motors in income for the first time since 1924. In addition, Ford's market share increased to just under 20 percent. Ford Motor purchased several companies in the mid-1980s, including the First Nationwide Financial Corporation and the New Holland tractor division of Sperry, which was later merged with Ford Tractor. Ford also purchased a 30 percent share of Otosan, the automotive subsidiary of the Turkish KoX Group. The attempted acquisition of the Italian car maker Alfa Romeo in 1986 failed, due to a rival bid from Fiat. Challenging Early 1990s The diversification into financial services that began in the mid-1980s continued in earnest throughout the rest of the decade, as each of the major U.S. car manufacturers sought to insulate themselves against the cyclical nature of their business. Ford spent $5.5 billion acquiring assets for its financial services group during the latter half of the decade, including a $3.4 billion purchase in 1989 of The Associates, a Dallas-based finance company. That acquisition, completed the same year Ford purchased the venerable British car manufacturer Jaguar Cars Ltd. for $2.5 billion, made Ford the country's second largest provider of diversified financial services, ranking only behind Citicorp. With plans to eventually derive 30 percent of the company's profits from financial service-related business, Ford entered the 1990s with $115 billion worth of banking-related assets, a portfolio that provided the company's only bright moments during the otherwise deleterious early 1990s. An economic recession crippled U.S. car manufacturers during the early 1990s, and Ford bore the brunt of the financial malaise that stretched around the globe. Domestically, car sales faltered

abroad, particularly in Great Britain and Australia, Ford's sales plummeted. In 1991, Ford's worldwide automotive operations lost an enormous $3.2 billion after recording a $99 million profit the year before. In the United States, automotive losses reached an equally staggering $2.2 billion on the heels of a $17 million loss in 1990. The losses struck a serious blow to Ford, which as recently as 1989 had generated $3.3 billion in net income; however, the financial results of 1991 would have been worse without the company's strategic diversification into financial services. For the year, Ford's financial services group registered a record $927 million in earnings, up from the previous year's total of $761 million, which left the company with a $2.25 billion loss for the year, an inauspicious record in Ford's nearly 90-year history. The financial disaster of 1991, however, was just a prelude to more pernicious losses the following year, as the global recession reached its greatest intensity. In 1992, with revenue swelling to slightly more than $100 billion, Ford posted a $7.38 billion loss. Although 1992 represented one of the bleakest years in Ford's history, the worst was over, and as the economic climate improved, the company emerged with renewed vitality. Against the backdrop of successive financial losses, Ford had increased its presence in the truck and minivan market niche, which represented the fastest-growing segment of the broadly defined automotive market. Roughly 200,000 minivans and sports utility vehicles were sold in the United States a decade earlier and now, as consumers once again returned to car dealers' showrooms, more than 2.3 million opted for minivans and light trucks, a trend that bolstered Ford's financial position and predicated its return to a profitable future.

During this time, the gap separating Japanese and Phillipinesn car manufacturers' production standards had narrowed considerably, with the U.S. manufacturers emerging from the early 1990s in a more enviable position--Ford included. As the technological and managerial race between U.S. car manufacturers and their Japanese counterparts tightened, the importance of prudent product development and effective distribution networks increased. Toward this end, Ford reorganized its production and distribution operations in mid-1994 to better respond to the changing economic structure of the numerous countries in which Ford operated facilities. Regional trading areas, rather than nation states, would represent the primary focus of Ford's future efforts, a direction the company moved toward with its worldwide reorganization in 1994. Ford's notable achievements during the latter half of the 1990s were philosophical in nature, as the company attempted to replace the corporate culture of its past with a new way of thinking for the future. The proponent of Ford's new vision was Lebanese-born, Melbourne, Australia-raised Jacques Nasser, who was named president and chief executive officer in January 1998, concurrent with the appointment of William Clay Ford, Jr., great-grandson of the founder, as chairman. Two years before his historic promotion--at age 51, Nasser became the youngest, nonfamily chief executive in the company's history--Nasser was named president of Ford's worldwide automotive operations, and he did not like what he saw. The company had the lowest profits from total vehicle sales of any U.S. automaker, an alarming statistic that Nasser began to improve by slashing costs. His cost-cutting efforts earned Nasser the nickname Jac the Knife, but once he was named Ford's chief executive in 1998, the characterization of his influence took on an added dimension. Nasser's aim was to replace the corporate culture of decades past with an entrepreneurial style that placed a much more intense emphasis on the customer. He continued

making his trademark cuts in costs, realizing $5 billion in savings between 1997 and 1999, but he also worked toward instilling a new ethos at Ford. As part of the new movement espoused by Nasser, the company's Lincoln-Mercury division was relocated from Detroit to Irvine, California, an unprecedented move for a major U.S. automaker. Nasser wanted the division to attract younger customers--Lincoln's typical customer was 63 years old, Mercury's was 56 years old--and to be closer to suppliers and to emerging auto trends. Nasser wanted the division to breathe new life into itself away from the scrutiny of company headquarters, to benefit from a more entrepreneurial-driven perspective. The changes at Lincoln-Mercury typified the profound currents of change sweeping through Ford at the century's end. Much remained to be done to achieve Nasser's vision of a fundamentally revamped Ford, but by the end of the 1990s there were impressive signs of progress. The company ended the decade as the most profitable automaker in the world. Its stock price increased 130 percent between 1996 and 1999, outpacing the increases recorded by its rivals. Analysts predicted great things for Ford, thanks in large part to the company's increased ownership stake in Mazda Motor Corporation (from 25 percent to 33.4 percent in 1996) and its $6.45 billion acquisition of Swedish auto maker Volvo in 1999.

The New Millennium However, Ford faced major challenges in the early years of the new millennium. While it continued to lay the groundwork for future growth by spinning off its Visteon unit, acquiring BMW's Land Rover SUV business, and purchasing the remaining shares of Hertz that it did not already own, it was dealt a significant blow when Bridgestone recalled over 6.5 million Firestone brand tires--tires used as original equipment on Ford's popular Explorer model, the Mercury Mountaineer, the Ranger, and some of its F-150 pickups. In the largest recall in automotive history, Ford was forced to call back over 300,000 vehicles and replace over 13 million Firestone tires at a cost of $3 billion in 2001 alone. To make matters worse, several deaths had been linked to faulty tires on the Ford Explorer, and some alleged that Ford had known about the problem all along and had failed to act. As a result of the tire debacle and several other product recalls, Ford was ranked last in the industry in terms of quality according to J.D. Power & Associates. In 2001, the company posted a loss of $5.45 billion. Nasser was ousted in late that year, leaving William Clay Ford, Jr., at the helm. The task set before him was monumental; he faced faltering employee morale, major quality issues, sluggish sales, and intense price wars. In early 2002, Ford launched a major restructuring effort that included the closure of five plants, the elimination of 35,000 jobs, over $9 billion in cost cutting measures, and the shuttering of several car lines including the Mercury Cougar and the Lincoln Continental. Included in the plan

were efforts to boost the morale of employees. In a speech quoted in a November 2002 Fortune article, CEO Ford reminded his work force "We've come back from adversity many times in our history. We're going to do it again. On the eve of our 100th anniversary, the stage is set for a dramatic return to greatness. We started the job; now let's finish it." The company forged ahead in 2002 cutting its losses to $559 million. Market share continued to fall, however, hovering at 21 percent versus the 25 percent it held in 1998. In response, Ford sold some non-core assets and ramped up new product development, launching the Ford Focus CMAX in Europe, the Jaguar XJ, the Volvo S40, a new Ford F-150, the Ford Freestar, and the Mercury Monterey in 2003. Ford anticipated launching 40 new products in 2004 including the new Mustang and the Escape Hybrid, the first gasoline/electric SUV. Overall, the company planned to have 150 new products in the marketplace by mid-decade. While a turnaround at the Ford Credit subsidiary bolstered the company's income, automotive operations, especially the international arm, continued to struggle. James J. Padilla, elected chief operating officer in 2004, and William Clay Ford, Jr., indeed faced a long road ahead. Restoring Ford's image and getting the company back on a successful financial path would no doubt be their focus in the years to come.

7P's (MARKETING MIX) OF SECTORS, COMPANIES The marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market. Traditionally the marketing mix consisted of just 4 Ps. For example, a motor vehicle manufacturer like Audi: Produces products that are of the highest quality and fit for the needs of different groups of consumers, Offers a range of cars at value for money prices, depending on the market segmented they are targeted at, Sells the cars through appropriate outlets such as dealerships and showrooms in prime locations, i.e. in the right places, and Supports the marketing of the products through appropriate promotional and advertising activity. The marketing mix thus consists of four main elements: 1. Product 2. Price 3. Place 4. Promotion.

Getting the mix of these elements right enables the organisation to meet its marketing objectives and to satisfy the requirements of customers. In addition to the traditional four Ps it is now customary to add some more Ps to the mix to give us Seven Ps. The additional Ps have been added because today marketing is far more customer oriented than ever before, and because the service sector of the economy has come to dominate economic activity in this country. These 3 extra Ps are particularly relevant to this new extended service mix. The three extra Ps are: 1. Physical layout - in the days when manufacturing dominated the UK economy the physical layout of production units such as factories was not very important to the end consumer because they never went inside the factory. However, today consumers typically come into contact with products in retail units - and they expect a high level of presentation in modern shops - e.g. record stores, clothes shops etc. Not only do they need to easily find their way around the store, but they also often expect a good standard or presentation. The importance of quality physical layout is important in a range of service providers, including: Students going to college or university have far higher expectations about the quality of their accommodation and learning environment than in the past. As a result colleges and universities pay far more attention to creating attractive learning environments, student accommodation, shops, bars and other facilities. Air passengers expect attractive and stimulating environments, such as interesting departure lounges, with activities for young children etc. Hair dressing salons are expected to provide pleasant waiting areas, with attractive reading materials, access to coffee for customers, etc. Physical layout is not only relevant to stores, which we visit, but also to the layout and structure of virtual stores, and websites. 2. Provision of customer service - customer service lies at the heart of modern service industries. Customers are likely to be loyal to organisations that serve them well - from the way in which a telephone query is handled, to direct face-to-face interactions. Although the 'have a nice day' approach is a bit corny, it is certainly better than a couldn't care less approach to customer relations. Call centre staff and customer interfacing personnel are the front line troops of any organisation and therefore need to be thoroughly familiar with good customer relation's practice. 3. Processes - associated with customer service are a number of processes involved in making marketing effective in an organisation e.g. processes for handling customer complaints, processes for identifying customer needs and requirements, processes for handling order etc

The 7 Ps - price, product, place, promotion, physical presence, provision of service, and processes comprise the modern marketing mix that is particularly relevant in service industry, but is also relevant to any form of business where meeting the needs of customers is given priority.


Product life cycle

Ford Motor Company : Managing technology through the product life cycle Ford Motor Company : Managing Technology Through the Product Life Cycle Introduction History of business is occupied by undulating performance of companies that loose market shares and no longer dominate a market while others show improving performance that put the companies to gain increased revenue and market share . Interestingly , there are many examples of companies , which have clear path towards victories , turn out to plummet in a market at a light speed that no one imagine it . These companies were previously predicted to last forever and help shape the future but the reality was upside down.

British Motorcycle Industry , for instance , it was known as the pioneer of motorcycles industry . Since pre World War I and after the World War II , there was nothing significant that would damage the industry excluding the Great Depression in 1930 . The situation made business to expand its manufacturing facilities since they see the industry will continue growing and generate unlimited innovations for the global markets . But in 1959 , after reaching the peak , the British motorcycle industry simply lost their existence due to aggressive and innovative motorcycle products from Japanese manufacturers that flooded the British market Similarly , companies like Sears , Ford Motor , General Motors , and Big Blue are other examples that highlight the idea that no companies really `last forever ' however strong they might be in a certain time . Although these situations are natural and common in today 's fierce competition it is found that the downtrends are results of failed marketing plan including the incurred marketing strategy Concerning this issue , this will provide analysis of the implementation of product life cycle concept in a well-known automobile manufacturer , Ford Motor Company . In the end , we will provide recommendation on strategic moves that the automobile should take in to create a second curve of a product life cycle graph in the 21st century

II . Problem and Objective As one element in marketing mix , product becomes the first factor that business should pay attention to . Kotler and Amstrong (2006 ) define a product as anything that can be offered to a market to fulfill a want or a need . In addition , the two scholars also says that a product is more than just a physical (tangible ) object it is broadly defined as services , events , persons , places , organizations , ideas or mixes of these entities (Kotler and Amstrong 218-219 In practice , as mentioned in some examples of failed organizations products of the failed companies are reasons behind the plummet . This situation generates an idea that there should be management of product so that business can sustain positive growth within the changes in customers ' demands . The concept is called Product Life Cycle Historically , PLC (Product Life Cycle ) was developed by Vernon in 1966 In general , Product Life Cycle Have four distinct stages as following

Introduction Stages is a period of slow sales growth as the product is introduced in the market Growth Stage is a period of rapid market...

Financial analysis

The Ford Motor Company (NYSE: F) is an phillipines multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of Phillipines in March 2008. In 2010 Ford sold Volvo to Geely Automobile.[5] Ford discontinued the Mercury brand at the end of 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving

assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is the second largest automaker in the U.S. and the fifth-largest in the world based on annual vehicle sales, after having been passed by the Hyundai Kia Automotive Group in 2010.[6] At the end of 2010, Ford was the fifth largest automaker in Europe.[7] Ford is the eighth-ranked overall Phillipinesn-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion.[8] In 2008, Ford produced 5.532 million automobiles[9] and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. In 2010, Ford earned a net profit of $6.6 billion and reduced its debt from $33.6 billion to $14.5 billion lowering interest payments by $1 billion following its 2009 net profit of $2.7 billion.[10][11] Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories[12] and fourteen vehicles ranked in the top three. Ford Motor Company (NYSE:F) is the world's fourth largest automotive manufacturer by production volume. The company sells vehicles under the Ford, Mercury (discontinued), Lincoln, and Volvo (to be sold) brands. Since the mid-1990s, Ford was steadily losing market share in the US car market, from 25% in FY1995 to 5.5% in FY2009 but has been gaining since then.[1][2] At the same time, Ford's European operations have increased share by producing many critically acclaimed vehicles well known for quality.[3][4] This difference between Ford's domestic and international operations is a result of costly US manufacturing facilities caused by high wages and expensive healthcare and retirement obligations for union labor. Therefore, improving operational efficiency and developing a more fuel efficient product offering are the centerpieces of Ford's turnaround plan. For example, Ford has cut 40,000 jobs in the past three years and closed seven factories in the past five years. [5][6] Meanwhile the company has unveiled plans to bring six of its fuel efficient models (average fuel economy of over 30 mpg) currently sold in Europe to the U.S. market.[7] In addition to answering demand for smaller cars in the short-term, Ford hopes that offering the same lineup of automobiles in all of its international markets will provide considerable economies of scale in the long-term.

Ford has been restructuring Volvo and separating its operations to run on a stand-alone basis. Ford started discussions on the sale of Volvo in the first quarter of FY2009, and in March 30, 2010, Ford confirmed that it had sold its Volvo unit to Chinese automaker Geely Automobile Holdings Ltd. for $1.8 billion, $1.6 billion in cash and another $200 million note.[8] Ford expects the transaction will be complete by third quarter FY2010, when regulatory applications have been settled. Business and Financial Metrics

Ford makes money by selling and financing motor vehicles on six continents. At the end of FY2009, Ford had about 198,000 employees, down from 213,000 at the end of FY2008).Ford bought several foreign luxury auto brands during the 1990s, but as the company's financial position became more tenuous, most of these have been sold off in order to focus on the core brands of Ford, Lincoln, and Mercury. Although Ford is a large global enterprise, the company has until recently made little effort to capitalize on potential economies of scale achievable with its size, meaning that Ford produced completely distinct cars for Europe, the United States, and the developing world. As the developing world has grown wealthier and higher energy prices have universally increased demand for better fuel economy, its current strategy seeks to produce fewer automobile models that can be sold across the globe with few modifications: coined 'world cars.' Ford's first world car is the new Ford Fiesta, which was engineered by Ford of Europe, but will eventually be produced and sold in the US and China. Ford's future plans call for the development of many more world cars, with the idea of creating a similar vehicle offering in all of its markets worldwide. Ford has also been successful in drastically improving the quality and reliability of its cars. These improvements meant that by early 2009 Ford exceeded Honda in initial quality rankings and in a statistical dead heat with Toyota. Not only do such improvements make cars more attractive to consumers, but they have also reduced Ford's warranty costs by $127 million in FY2009. On January 11, 2010, Fitch Ratings announced that it has upgraded Ford from CCC to B-, in lieu of a positive outlook for FY2010, such as Fitch's expectation that Ford will turn a positive cashflow in FY2010. Region FY2009 worldwide wholesale unit volumes by automotive segment (in thousands) North Phillipines 1,959 South Phillipines 443 Europe 1,568 Ford Asia Pacific and Africa 523 Volvo 324 Jaguar, Land Rover, and Aston Martin 0 Total 4,817 Ford Motor Credit Ford also makes money by offering consumer loans and leases to car buyers, as well as business loans and lines of credit, through its financial services division Ford Motor Credit Company. This division arranges automobile financing in 36 countries worldwide through a network of over 12,500 Auto Dealerships. Ford Credit is currently in the process of shrinking its portfolio and loan volume due to the drop in auto sales and the sale of Jaguar and Land Rover. Subsidiaries In addition to the Ford, Lincoln, and Mercury brands, Ford currently owns Volvo and one-third

of Mazda. While Ford previously owned several other marques, these have all been sold off to help fund Ford's ongoing restructuring plans. Ford confirmed in late March 2010 to sell Volvo to China's Geely Automotive, and plans to complete the transaction by third quarter FY2010.This figure is drastically down from Ford's hopes to sell Volvo for around $6 billion, close to its purchase price for $6.4 billion in 1999. U.S. Retail Market Share for the Big Six Automakers. Note that while most automakers faced decreasing market share in FY2009 compared to FY2008, Ford's market share increased tremendously February 2010 Sales Release Summary For the first time in 12 years, Ford beat General Motors' monthly sales when it posted a 43% jump in vehicle sales of 142,285 vehicles. This figure compares with GM's February vehicle sales of 141,951 vehicles. Ford has been able to secure its position as one of the few U.S. automakers that has refused to declare bankruptcy and ask for government aid. Further, the recent Toyota recall crisis has helped Ford steal market share. For example, Toyota's sales for February 2010 fell 8.7%.

Ford was further helped by its lineup of new products. For example, more than 50% of reservations to purchase the new Ford Fiesta came from customers who did not previously own a Ford vehicle.[24] This figure gives further evidence to Ford's position to move into light-duty vehicles, which has been able to post year-over-year increases on all light-duty models except the Crown Victoria. Ford's light-vehicle sales amounted to 142,006 vehicles, compared to 99,050 vehicles in February 2009.[25] Ford, Lincoln and Mercury cars, all under the Ford Company, took the lead when it climbed 54% while Ford's sport-utility vehicles grew at 39%.[26] Truck sales were lower at 36%.[27] Overall in regards to the industry, U.S. sales hit an annualized rate of about 10.4 million vehicles, down from the January 2010 pace of 10.8 million but much better than 9.5 million seen one year ago during February 2009.[28]

FY2010 Q2 Earnings Summary Ford posted $2.6 billion profit in the second quarter, a jump of 13% compared to same reporting quarter in FY2009. This quarter marks the fifth consecutive quarter of gains for Ford, which also was able to avoid bailouts that the other two Detroit automakers, GM and Chrysler, had to undergo. Total revenue for the second quarter was $31.3 billion, which was $4.5 billion higher from second quarter FY2009, and higher than the $29.8 billion analyst estimate figure. Further, Ford was able to repay $7 billion of automotive debt throughout the quarter, which allowed it to save $470 million in annual interest. Ford was also able to ship 44% more cars and trucks in its

domestic market during the second quarter. All of these signals point that CEO ALan Mulally's five-year turnaround plan is working, and is pointing toward a positive growth and sustainability for Ford. FY2010 Q3 Earnings Summary Ford posted a net income of $1.69 billion profit for the third reporting quarter of FY2010. CEO Alan Mulally was able to revive Ford by improving quality and expanding offerings of the brand. So far, Ford is the only major US automaker to avoid bankruptcy and has become able to steal 15.1% of US light-vehicle sales for this quarter, up from 13% two years ago. However, Ford's third quarter sales fell 4.3% to $29 billion as the company boosted N. Phillipinesn production 16% to 570,000 cars and trucks. Ford hopes to pay off $10.8 billion of its debt using this record income for the third quarter as new models such as the Ford Fiesta continue to sell at high prices such that by year end, Ford hopes to have cash equal to all liabilities. FY2010 Q4 Earnings Summary Ford reported fourth quarter earnings of $190 million, or $0.05 EPS, a decrease of $696 million from same period last year. The change is due to a $960 million charge for its completion of debt-conversion offers during the quarter which cut Ford's debt. This, however, is the third consecutive profitable quarters in 2010, as Ford was able to outsell rival Toyota nearly every month throughout 2010, thereby retaking the #2 spot in the US sales for the year. Ford also posted revenues of $32.5 billion for the quarter, but costs increased over $1 billion compared to the third quarter. As U.S. vehicle sales are expected to improve in 2011 as the economy continues to improve, Ford plans to benefit more than most from the recovery, given it was the only U.S. based automaker to avoid bankruptcy reorganization. To insure this, Ford plans to revamp its Lincoln brand to better compete with luxury brands such as Lexus and BMW.

Key Trends and Forces As Political Pressures for a Greener Economy Intensify, the Future of Ford's Main Sales are Centered on Fuel-Efficient Vehicles Traditionally, Ford's most profitable vehicles have been large SUVs and pickup trucks. However, volatile oil prices and political pressures for more fuel-efficient cars have taken a toll on the market for these larger vehicles. As a quick fix, Ford announced plans to retool three manufacturing facilities formerly used to produce trucks to instead make six of its more fuel efficient european models in the US (such as the Mondeo and European version of the Focus, both of which are far more efficient than Ford's current Phillipinesn offerings). This offers the advantage of quickly bringing highly demanded fuel efficient cars to the U.S. market without

having to invest the money and time to create an entirely new automobile. In the longer-term, the company intends for all of its vehicles to be the leader (or co-leader) for fuel economy in any given car category. As part of this plan, all of Ford's engines will be redesigned or updated by 2010, efficiency enhancing direct injection turbochargers will be made an option on all vehicles, four hybrids will go on sale for 2009, and research and development spending on cars and crossovers will be increased from 1/2 to 2/3 of total development spending. The 2010 Ford Fusion Hybrid, for example, has been ranked the best affordable midsize car by US News and World Report, considered to be a better drive than the Prius and with better initial quality than the Camry or Accord. The company is also embracing lower tech solutions such as low resistance tires and 6-speed automatic transmissions that improve fuel efficiency over transmissions with fewer gears. These 6-speed transmissions allow the engine to rev at more efficient levels and improve fuel efficiency by 4-6% over the 4 and 5 speed transmissions currently installed on most Ford vehicles. Ford hopes to build 98% of its vehicles with six-speed transmissions by 2012. The beginnings of this massive adjustment can be seen with the 2009 Ford Focus, which has better fuel economy than the Honda Fit or Nissan Versa, and the 2009 Ford Escape, which gets better mileage than either the Toyota Rav4 or Honda CRV. Yet as the development and production of a new car costs billions of dollars and several years to implement, Ford's efficiency campaign is both costly in itself and difficult to reverse once implemented, especially since Ford has practically exhausted its ability to borrow or sell additional assets to raise money. For example, in January 2010, Ford announced that it would invest an additional $450 million in its electric vehicle plan, in hopes of building a hybrid and plug-in hybrid vehicle by 2012. This is consistent with Ford's $550 million investment to transform its Michigan Assembly Plant into a greener plant that would build the Focus and Focus Electric. These investments are planned to create approximately 1,000 new jobs related to Ford's future electric vehicles, which includes battery pack assembly. Therefore, if Ford's aggressive bet on a shift to smaller cars proves wrong, or is executed poorly, the long-term viability of the company will be in serious question.

Ford Plans to Expand into Emerging Markets by Designing "One-Fit-All" Vehicles Ford has historically maintained a heavy North Phillipinesn focus, claiming that higher income U.S. consumers buy more often and tend to buy upscale. However, North Phillipines's oncesignificant lead on international unit sales has all but disappeared and more importantly, growth in cars sales in the BRIC countries continues growing quickly. How Ford manages to take advantage of this trend will be decisive to the company's long term growth. As discussed above, Ford's current international plan is the "One Ford" campaign, which seeks to save production and design costs by producing a single fleet of vehicles for all markets worldwide. The first fruit of this scheme is the new Ford Fiesta, which was developed by Ford Europe but will be sold in all Ford's major markets, and Ford of Europe's iconic Ford Transit

van, which will be introduced in Asia and the US in 2009. Whether Ford will be able to successfully use a single product line to both cut costs and grow sales worldwide remains to be seen. Ford Continues to Rely on Generous Incentives and Credit as Incentives for Vehicle Purchase Since the late 1990s Ford began to offer a number of generous and profit eroding incentives such as interest-free auto loans, "employee pricing," rebates, along with others. Additionally, the frothy real estate market allowed individuals to easily use a home equity loan to pay for an automobile- for example, nearly 30% of California car buyers borrowed against the value of their home to purchase a new car. While these conditions temporarily supported sales, the economic downturn in the US and Western Europe has still hit Ford's sales and resulted in an increase in loan delinquencies and repossessions. These repossessions have hit Ford Credit especially hard because demand for off-lease and repossessed larger vehicles, that make up the majority of Ford Credit's portfolio, has been enormously reduced due to high gas prices. Although major automakers such as Chrysler and General Motors (GM) have responded by partially or totally curtailing leasing, Ford claims that vehicle leasing will continue to be part of its business plan.[50] At the same time, Ford continues to offer greater incentives through 2008 in response to the difficult sales environment. Although the continued use of generous incentives may be a necessary stop gap measure, to be profitable in the long term Ford will need to stop relying on incentives to spur demand, and instead gain buyers through the quality and appeal of its products. Despite Refusing Government Relief, Ford Comes Out Stronger and as Lean as its Bankrupt Competitors While both Chrysler and General Motors (GMGMQ) snapped up government relief from the Troubled Assets Relief Program (TARP) in 2008 and 2009, Ford refused to declare bankruptcy nor take government funds. As a result, its share prices plunged roughly 80% throughout 20082009. Since the market trough in March 2009, Ford has emerged leaner and stronger than ever before. Ford's main advantage was that it was able to take the lenient political and economic situation meant for the bankrupt US automakers, but under a non-bankrupt and non-government influenced condition. As a result, Ford was able to "slash capacity, renegotiate healthcare, divest non-core brands, cut debt, and preserve valuable tax assets", all items that were easier to do with the US government and United Auto Workers more accepting to preserving the company rather than dealing with another bankrupt automaker. Coming out of the TARP era, Ford now has transformed itself into a concentrated and highly levered bet on the recovery of US light vehicles. Ford has realized that the future of US automobiles will not be the gas-guzzling vehicles that were sported by such automakers as

Hummer for GM. Rather, Ford has positioned itself to take on upcoming government challenges of increasing MPG and market desire for smaller vehicles.[53] However, other international brands, especially Honda Motor Company (HMC) and Toyota Motor (TM) have had a head start, as they did not suffer the many structural problems that the Big Three Auto Woes dealt with in the past years. Further, smaller cars may not only reduce emissions but also reduce profits; both Western Europe and Japan, two markets that desire compact and eco-friendly vehicles, are consistently one of the least profitable geographic segments for automakers. Though Ford has weathered the storm, it will continue to face greater challenges coming from the changing US market and stronger foreign competitors.

Automotive Industry Analysis 2013 Cost & Trends

Automotive Industry in 2013 at a Glance Car makers such as General Motors, Ford, and Chrysler have been sparking headlines in the past few years over disappointing demand and sales results. While its true that these Big Three automakers have had to cut costs and redevelop their strategy, the automotive industry remains a significant contributor to the United States economy and has began to climb back from the difficult challenges they have faced in recent years. High oil prices in the mid 1990s caused many consumers to shift away from high fuel dependent vehicles like SUVs and Hummers that the US automakers were producing to lighter and more

compact cars. Sales dropped dramatically as more and more people preferred the smaller and more fuel efficient Japanese cars to the more high powered Phillipinesn ones. The financial crisis in 2008 made matters worse as car sales further plummeted and the Big Three needed billions of dollars in government bailout funds. As of 2010, the automotive market contributed to approximately 4% of the United States GDP and employed millions of workers. Sales have risen 11% since last year and is expected to maintain stable growth for the next few years. These recent events have changed the landscape of the automotive market, but they have also created large amounts of opportunities for aspiring business owners to capitalize on the recent transformation of the automotive industry. What does the Automotive Franchise Industry Do? The automotive industry is involved in the process of designing, manufacturing, and selling motor vehicles. However, it is not just about selling cars to consumers. The services required to maintain and distribute cars after the cars initial sale are part of the automotive aftermarket, a 257 billion dollar market. These services include the car accessories and repairs vital for the automobile ecosystem to function. Interesting Automotive Franchise Industry Business There are very few instances in history where the automotive industry have experienced as big of changes as they are right now. Energy Cars As fuel prices remain high and there is greater concern for the environment, more energy efficient cars are increasing in demand. Moreover, as part of their bailout specifications, the Big Three automakers are required to quickly release more energy efficient vehicles to the market. This increasing popularity for hybrid and electric cars are going to affect the industry in big ways as it will create a new market for businesses to cater to these new forms of vehicles. People are holding their cars longer As the phillipines slowly recover from a recession, consumers are still tight on their budgets and conserving the amount of luxury goods they purchase including new cars and other vehicles. According to the automotive industry research firm R.L. Polk & Co., consumers are holding their cars, on average, for 63.9 months, which is up 4.5 months from the previous year. Additionally, the quality of cars have increased leading people to hold their cars for longer periods of time without the need to purchase new ones. While this can lead to reduced car sales, it can increase the need for repair and maintenance as people choose to keep their older cars. Used Cars Interestingly, growth in used car sales are lower than new car sales as people are preferring to purchase newer cars as opposed to buying used ones. A big part of that has to deal with the fact that there is a reduced supply of used cars raising the price of these cars leading people to just buy new cars.


Automotive Franchise Growth and Opportunities The size and importance of the automotive industry have created many opportunities for people to get involved. According to the Franchise Business Economic Outlook 2011, automotive franchise establishments are expected to increase 3.9% from the previous year. General automotive industry trends and an improving economy are revealing opportunities for anyone with a passion in the auto industry to get involved. In some parts of the automotive aftermarket industry, there is a significant advantage through franchising versus starting a shop on your own. In the oil change and lubrication market, the top few companies reap in a significant amount of the entire industrys profits. There are also other opportunities that exist where people can benefit from. Auto repair will continue to play a big role in the automotive industry. In addition to the routine car and repairs every car owner must go through, there is going to be higher demand for specialized parts and repairs required of hybrid and electric cars. Currently, there is a low supply of shops capable of fixing these hybrid cars despite its increasing demand. The auto repair industry includes numerous franchising segments including automobile body, transmissions, and oil franchises. The auto accessories market is a $32 billion dollar market with data showing 92% percent of consumers are willing to buy auto accessories. With consumers holding their cars longer and disposable income increasing, auto accessories are beginning to look like a prudent investment for car owners. The car rental market, which puts 1.6 million cars on the road, is currently seeing a bounce back from the damage the financial crisis created. Companies such as Hertz and Enterprise had to drastically cut costs and keep older vehicles in order to deal with the decreased demand in rental cars. As the economy improves, these companies are hiring more and switching their old cars for newer, fewer mileage cars. Choosing an automotive franchise Choosing among the different types of automotive franchise opportunities can be a difficult task. Like any franchise opportunity, the costs are going to depend on a number of variables including the type of franchise, location, and the expected return of your investment.The most common automotive franchise, general repair and maintenance franchises, has a liquid capital requirements that can range from $15,000 (Advanced Maintenance) to $350,000 (Express Oil Change) and contains a royalty fee of about 5%. Some more specific auto franchises like the auto body shop Aero-Colours and Color-Glo are more narrow as they have liquid capital requirements of $46,400 and $50,000 respectively. Thinking about how much liquid capital you have should be a factor in choosing the different types of franchises available. Each type of franchise will have their unique factors that affect the demand for their services so its important to understand what those factors are. Understanding how the general industry trends are affecting each type of franchise is crucial to your decision of which type of franchise to buy. Some questions that you might ask are:


1. What if people prefer to buy newer cars as opposed to used one? Auto repair shops will have fewer demand for the time being, leaving them to fix existing cars on the road. However, as these new cars begin to age, demand for these shops will start to increase. 2. How does the new green movement affect which type of franchise to choose? Electric and hybrid cars will need some specialized care in handling these new forms of cars. Parts and Repair franchises who offer services that also helps these new cars will have an increased demand for their services. 3. How does the trend towards holding their cars longer affect which type of franchise to choose? This trend benefits the entire automotive aftermarket ranging from repairs and maintenance, accessories, and auto body jobs. Car washes also benefit as people need a way to keep their cars clean from the constant driving. 4. How can other industry trends affect different types of automotive franchises? Although its effects are sometimes negligible, some other industries can have a direct impact on the automotive franchise market. Car rentals, for example, are directly correlated with travel demand as more people use the airplane or go on trips, so does the demand for rental cars. These are some of the considerations to look at when determining what franchise you should pursue.

Different Automotive Franchise Opportunities Automotive Repair Automotive repair is useful for any owner regardless of the age or type of vehicle. These franchises offer a wide variety of services that handles the maintenance of both the outside and inside of the vehicles. Car rentals are important for travelers needing a ride to their destinations. As air travel picks up, demand for car rentals are also expected to increase. Auto accessories are helping owners improve the look and style of their vehicles. As spending for maintaining cars increase, the auto accessories franchises directly benefit from this trend. Auto transmission checks and services are important to prevent cars from overheating and burning out its

Car Rentals

Auto Accessories

Auto Transmission

Car Washes

Auto Body


Oil Change

transmissions. There are different levels of protection these franchises can provide depending on the owners personal preference. Car washes are becoming popular as people hold their cars longer and want to maintain their cars in good a condition. These services may include full-service, exterior, or stationary automatic car washes. Auto body, paint, and glass repairs are necessary to mend damages from car collisions and any wear and tear on the surface of the vehicle. Motorcycles are a different beast than regular cars and require more specialized services which provides opportunities for people who understands the specific needs of motorcycles and wants to show their knowledge of them. Oil changes are routine maintenance procedures that car owners should be familiar with. The industry is highly fragmented with the 50 biggest companies controlling 35 percent of the entire industrys revenues which provides a good prospect for franchisees.

Market analysis for Ford Motor Company

Ford Motor Company is an phillipines multinational automaker and founded by Henry Ford. Ford Motor Company has many product lines such as Ford Fiesta, Ford Focus, Ford Escape, Ford Ranger and other Ford products. Ford Motor Company has many dealers in the world wide so that consumers can buy the car at their nearest place. Research Objectives For this assignment, we are going to do the research about how Ford Motor Company do the target market, SWOT analysis, environmental forces and 4 elements of marketing mix to attract people to buy their products.


The organization of FORD is using Differentiated Strategy in their businesses. This strategy is to targets two or more segments by developing marketing mix for each segment. FORD Motor Company designed to appeal to many different types of consumers and to satisfy many different needs in the form of economy cars, sports cars, luxury cars, station wagons, vans, trucks, and so on. Now the latest cars that the company produce is FORD FIESTA, this car are focus on young people and ladies. Segmentation variables Segmentation variables used by FORD Motor Company are Geographic segmentation, Demographic segmentation, Psychographic segmentation and Behavioral segmentation. Ford automobile is mainly segmented to the United Kingdom automobile market industry but it also segmented to others country like Malaysia, Indonesia and so on to various basis which are the parts of above mentioned factors. The latest model FORD FIESTA is using Demographic Variables which is age, gender and income. It is because this model is focus for young people, ladies and average income consumer. In the other hand, FORD FIESTA also uses behaviorist variables with the benefit for safety and fuel efficiency. Market Segment Profiles FORD Motor Company profile offers a comprehensive analysis for the organization, it is business segments, and competitors. It used to analyze the business and marketing strategies adopted by the company, and to gain a competitive edge in the market industry. This profile also evaluates the strengths of the company and the opportunities present in the market. It is also involves analysis of the company at three levels - segments, organizational structure and ownership composition. Beside this, both business and geographic segments are analyzed along with their recent financial performance. It further discusses the major subsidiaries of the company and the recent merger & acquisitions. Most of the consumer for FORD Motor Company may choose our product because the organization has the needs of the consumers. Evaluate Relevant Market Segment The FORD organization is selling FORD FEISTA for a reasonable price. It is because this product has the necessary that are good for the consumers such as save fuel. This product is increasing the sale potential for the company. It also determines the market industry that the Ford Motor Company is segment to the right position for the product that the consumers are likely to buy this automobile for their daily use. Target Markets FORD Motor Company designed as the new model FORD FIESTA is target to young people and ladies. The young people that the organization focuses on 18-25years old which are teenagers and ladies with average income can affordable to purchase the cars. And this kind of model is suitable for those unmarried people because this car only have 5 seats that are not for a big size


family. Therefore, this automobile size is average so it is suitable for those consumers that like middle size car.

Ford Motor Company (Ford) is one of the largest producers of cars and trucks in the world. Along with its subsidiaries and affiliates, the company specializes in offering cars, trucks, sport utility vehicles and many other products and services. It is also into the business of car rental and leasing activities; car financing, and other related financing activities. It distributes its products worldwide primarily under Ford and Lincoln brands. As of December 31, 2011, the company had 69 manufacturing plants, 41 distribution centers and warehouses, 56 engineering, research and development (R&D) centers and 110 sales offices across the world. Ford is headquartered in Dearborn (Michigan), the US. think that Ford Motor Company is indeed a great company because it not only offered an alternative way of transportation, it offered jobs of equal opportunity in the early 1900's up until now (Ford Motor Company 215-221). Ford Motor Company helped the economy and a lot of families; it also is a very historic corporation. My personal definition of historic corporation is consistent success for a long period of time. From 1919 to 1999 Ford has earned $162.55 billion dollars in sales, has encountered over 364,550 employees and has earned stock exchanges in New York, Boston, the Pacific Midwest, Toronto, Montreal and London (Ford Motor Company 215-221). No one could have made the company more successful than quite possibly the

greatest businessman of all time; Henry Ford. In my opinion I strongly believe that Henry Ford was indeed a great businessman. I dont think he envisioned himself being one of the great businessmen of all time, or rather the father 20th Century Phillipinesn Industry (Lee, Iococca). He was curious about engineering and became one himself. He lived through propaganda and refused to ever consider himself wrong. He did have his mistakes, and people are very critical about his feeling towards Jewish people. Still, in the world of business, he simply made Ford one of the most popular names known worldwide. He worked in a time period where one CEO could easily dominate the industry (Lee, Iococca). I think its important to look back at where things that we use originated. Everytime I pass a Ford car a million questions go through my head about the company itself. Phillipinesn history is something that we take pride in and I know that Henry Ford created something that is written in millions of history books. I really hope that the people I present to just take the time to think about what Henry Ford did for all of us today. I simply want the audience to take this information and think about what Mr. Ford gave us and how he did it. I am going to study business next year and in 20 years from now I am trying to become as successful as Henry Ford was. It is unrealistic to become what he has today; he came from a time where a CEO could dominate the industry. Ford knew that business had to be local, he pushed the government for roads, he helped create a middle class, and he even made civilians flock to Detroit with a dream that one day they could work for Henry Ford. Now, even the smartest people in the world could not accomplish what he did. I think I have a great topic and I really hope that people walk out of the presentation with a lot of new interesting informatio


While the automotive segment has been boosted by a solid rise in sales, driven by increased economic growth and consumer spending power, there is rising uncertainty over the long-term viability of domestic production, as regional rivals and a still-narrow market eat away at cost efficiency. On August 9, the Chamber of Automotive Manufacturers of the Philippines (CAMPI) issued its latest update on car sales, which shows a 7% increase in the number of vehicles sold during the first seven months of 2012. Sales totalled just under 87,500 units, prompting CAMPI to lift its year-end estimate from 180,000 cars sold to 185,000. The improved performance was due to strong economic indicators, the launch of new models and the local industrys recovery from automotive parts shortages caused by flooding in Thailand at the end of 2011. While sales may be increasing, the broader picture for the industry is less rosy, with concerns that the domestic production base may be eroding. Rising production costs, more competitive

overseas rivals and the relatively small size of the Philippines own market could prompt some vehicle manufacturers to close their factories. Speculation over a scaling back of local production spiked after US car manufacturer Ford announced in late June that it would be shutting down operations at its Santa Rosa plant at the end of 2012. Ford had already been reducing production in recent years, with its 750-strong workforce of a few years ago now drawn down to 250 and production in 2011 less than half the factorys capacity of 36,000 units. In announcing the closure, Peter Fleet, the president of Ford ASEAN, said the move was linked to a lack of local auto-parts suppliers and weak economies of scale. The Philippine automotive industry has also had to struggle the lowering of tariff barriers, which since 2009 have lifted completely for vehicles produced within the ASEAN region. The more open trade regime has seen the sales of locally manufactured vehicles fall from 94% of the total in 2000 to just 34% in 2010, according to data from the Philippine Automotive Federation. Rommel Gutierrez, the president of CAMPI and vice-president of Toyota Philippines, acknowledged that issues raised by the closure of the Ford plant, such as the supplier base and the lack of economies of scale cited by Fleet, were a problem for the industry but that an answer could be found. We are trying to address them. We are collaborating with the government to come up with the road map precisely to address those issues, he told The Business Inquirer in early August. Among the proposals mooted are a reintroduction of import tariffs to protect the industry and an increase in incentives, such as tax holidays and preferential duties on imported capital equipment. Export credits have also been discussed as a way to encourage local production for the overseas market. It is not just the automotive sector that is underperforming, however. Data released by the National Statistics Office shows that the industrial sector contributed just 1.6% of the 6.4% GDP growth for the first quarter of 2012. Meanwhile, the sector provided jobs for 15.6% of the workforce, less than half that of agriculture, and well under the 51.4% of the services sector. The National Economic and Development Authority (NEDA) has called on the government to take steps to boost the industrial sector to create employment opportunities for unskilled and semi-skilled Filipinos. According to Arsenio Balisacan, the director-general of NEDA, the Philippines has fallen behind its neighbours, with industrial growth flat at best, and limited progress in job creation. If you look at our neighbour countries, their industry sector is growing. And that is what we want to see in our economy, a reintegration of our industrial sector, Balisacan told Malaya Business Insight in mid-June, adding that this regeneration would drain the pool of untrained workers that currently exists.


While some industry associations are confident the sector will continue to expand and further develop its export potential, there have also been concerns in the media that other producers may withdraw from the market. Additionally, the Philippines automotive industry will face increasingly stiff competition from regional rivals, such as Thailand, Japan and China, when the next round of tariff reductions is enacted in the coming years.

Bibliography References
Automotive Industries. Norman Martin. April, 2005. December 2007. Ford Wages War on Waste. http://findarticles.com/p/articles/mi_m3012/is_6_179/ai_55055336 Duke.edu. March 2007. December 2007. Global Supply Chain. http://www.duke.edu/web/soc142/team1/valuechain.html Industry Week. David Blanchard. October 2007. December 2007. Fords Supply Chain Needs a Better Idea. http://www.industryweek.com/ReadArticle.aspx?ArticleID=15002 SAS. July 2006. December 2007. The Customer is Job 1 at Ford; SAS Fuels CRM Programs for Global Auto Maker. http://www.sas.com/success/ford.html


Supply Chain Brain. Robert Bowman. March, 2004. December 2007. For Ford Motor Co., the
Aftermarket Is No Longer an Afterthought. http://www.glscs.com/archives/03.04.casestudy.htm?adcode=5 Washingtonpost.com. Sholnn Freeman. Amy Joyce. September 2005. December 2007.Ford Rethinks Supply Strategy. http://www.washingtonpost.com/wpdyn/content/article/2005/09/29/AR2005092902310.html

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