Category Archives: land Rover

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Why Ford Should Be Aware

By Bobbie Johnson – February 21, 2012 | Tickers: F, GM, HMC, TM | Comments

Bobbie is a member of the Motley Fool Blog Network — entries represent the personal opinions of our bloggers and are not formally edited.

For over a decade Toyota (NYSE: TM) and Honda (NYSE: HMC) held the largest share of the midsize car market in America. these purveyors of family vehicles saw their sales and market fall flat in 2008; then the recession reared its ugly head causing those flat numbers to plummet. despite popular perception Honda and Toyota have never recovered. Between 2007 and 2010 Toyota was powerless to stop the sales of their best seller, the Camry, from bottoming out; a 31% drop. during those same years Honda also watched as their brand favorite, the Accord, dropped by 28%. both companies suffered further after the earthquake in Japan in 2011.

Surprisingly, during this time Ford (NYSE: F) saw an increase of sales for their Fusion line; a jump of 66% between 2007 and 2011 surpassing the Honda Accord.  with the Fusion being Ford’s darling for families, they are hoping to close the gap and pass by Toyota’s Camry and Nissan’s Altima, or at least catch up to them.

The upcoming Fusion model as some added features that Ford is hoping will draw customers away from Toyota, Honda, and GM. Technologies that keep you in your lane and help you parallel park are among the upgrades. Ford is also claiming that the plug-in hybrid Fusion Energi will achieve 100mpg in fuel efficiency.

In some ways Ford has changed the mid-sized market altering the field for competitors such as the General Motors’ (NYSE: GM) Chevy Malibu and the Hyundai Sonata. Should Ford really believe its own hype?  Other companies have and have paid the price for it. Admittedly, Ford has been putting out some impressive products the last several years with the Fusion being the latest in a healthy line of more fuel efficient, stylish vehicles; however, U.S. statistics beg to differ.

In 2010 Ford introduced the Fiesta, its smallest car. While the Fiesta performed decently in its first year, it has been gradually losing ground to the 2011 Chevy Sonic (a higher priced vehicle). next in line is the Ford Focus; it looks good and offers some nice features but found itself outsold by  the Chevy Cruz, the Honda Civic, and the Toyota Corolla. True, launching problems resulted in a ding to production but they have been addressed and fixed.

Ford Explorer made some changes to the family favored SUV giving it greater fuel efficiency and a more defined carlike feel. meanwhile, the F-series pickup are still the ultimate bestseller showing a nice 11% increase in sales; although, lost the market share due to the faster moving Ram and Chevy trucks. other Ford standards lost ground in 2011 including the Mustang and the Taurus. Strangely, the vehicles that bring in the most are at the tail end of their life cycles with Ford; the Fusion and the Escape.

Ford saw the end of 2011 with a market share of 16.5%, up half a point from 2010. the slight tick upward was partially the result of getting more sales from commercial fleets and rentals car lots. If one were to count showrooms sales only, you would see that actually lost roughly two-tenths of a point. Reality is that Ford sold 31% of the 2.1 million cars sold in 2011 to rental agencies and commercial fleets; 45% of those were Focus sales. in comparison, General Motors only sold 23% to fleets while most other manufacturers sold less than 10%. Fleet sales matter because they buy in bulk at discounted rates resulting in less profit for car manufacturers; not that fleets sales are necessarily bad, just not the most profitable.

When looking at the overall picture of Ford, you have to include the 3.3 million vehicles recalled in 2011, nearly as many as Honda who recalled 3.9 million and Toyota who called back 3.5 million. On the other hand, Ford’s recalls were considerably more than GM’s at 500,000 and Chrysler at 773,000.

Over the years Ford has done a lot of things right. For instance, Ford managed to keep itself together through re-structuring while most of its major US rivals were facing bankruptcy court. despite the tough times and massive losses, Ford turned itself around and began making a profit again in 2009. over the last three years Ford has made an estimated $16 billion; of course, this number doesn’t include the expected special tax gain for 2011.

Ford can credit it’s turnaround to Chief Executive Alan Mulally, formerly of Boeing. Mulally okayed the plan to mortgage everything Ford owned in exchange for a $23 billion dollar loan which helped Ford avoid the bankrupt path its rivals were following. Mulally also opted to get rid of Jaguar, Land Rover, Aston Martin and Volvo. he then reduced the company’s stake in Mazda. Mulally decided that Ford needed to focus on a new flagship brand, one that could be taken globally. he named the new strategy “One Ford”.

Mulally redefined how the company ran, he attended senior meetings encouraging the voices of his senior staff. he promoted new tenets; concepts like working together, accepting reality, and developing a product that buyer truly wanted. he made employees feel comfortable in the new regime.

Ford now presents a confident front, maybe too confident. the last time Ford became too overconfident they found themselves hip-deep in problems. in the 1990s Ford was coasting with the status quo. Peering through the haze of profits from their truck and SUV sales they declined to acknowledge the falling car sales along with losses in their global market. all Ford could see was a strong balance on their spreadsheets which set of a reckless spending spree resulting in the purchasing of several European car companies (at top dollar), Hertz car rental, and peripheral businesses like repair shops and a junkyard.

Despite its near downfall, Ford has emerged a leaner, better run company without having to bear the stigma of accepting government money. Ford recently reinstated the quarterly dividends that have been in suspension since 2006. the company has posted ten consecutive quarters of profit while continues to chip away at its debt load; currently standing at $12.7 billion.

In October 2011 Ford unionized labor force agreed to a new four year contract which resulted in the company’s credit rating upgrade. Ford is now within grasp of investment grade at all three major credit agencies.

Ford is not in the clear by any means. Rising commodity prices, worker bonuses, along with natural events like the Thai flooding have all put a dent in recent profits; however, Ford feels that it’s on the right track. in the mean time, Ford’s major competitors are getting stronger and back on their feet. It’ll be interesting to watch over the next few years. 

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Creating Off-Road History With the Land Rover Discovery 1

Covering the broadest possible market segments with various products lines has always been the marketing strategy of automobile makers unless you are just targeting a certain niche like the upscale sports dominated by Ferrari or the luxury upscale limousines like the Rolls.

Among SUVs, you have a number of Japanese, American and European makes competing for world markets. The Land Rover has been a traditional brand that had its roots in 1948 and has been the most recognized brand as a multi-purpose all-weather all terrain utility vehicle. its presence is everywhere, from the military forces in many countries, to expeditionary land transport as well as in the more mundane agriculture and industrial settings.

It wasn’t until the late 80s and early 90s that the phenomenon of SUVs took hold on the Land Rover to start marketing a more updated series of vehicles that are at once all-terrain all-wheel drive sporty with the creature comforts associated with urban driving on city roads. With that, the Rover Group Plc introduced the Land Rover Discovery 1 – the first in a series that redefined the Land Rover as an SUV for th90s and beyond

A Cheaper Range Rover by Design

The Discovery was born from a vehicle project code-named Project Jay with the specific objective of coming out with a new Land Rover model based on the chassis and drivetrain of the upscale Range Rover but at a lower price point to attract a larger budget conscious market and to keep the Japanese SUVs at bay. first unveiled in the UK markets in 1989 as a 3-door model with the larger 5-door variant appearing the following year, the Discovery also came out in the Japanese markets as the Honda Crossroad between 1989 and 1999 resulting from the technical partnership with Honda Motors. The partnership ended when BMW buying the Rover Group in 1994.

A 3rd party design consultant ware hired – the Conran Design Group in London, to help the Rover team design a more suitable interior for an all-terrain 4×4 to be positioned more as a cheaper lifestyle alternative to Range Rover. it ended with some remarkable designs that in 1999 won a British Design Award for its custom sunglass holder that’s uniquely positioned at the center of the steering wheel.

Most of its interior specs had been holdovers from a Range Rover design mock-up. its interior structure is basically that of a Range Rover with various functional design elements like its switchgear and instrument panel taken from the Montego and Maestro Rover series. its exterior also borrowed design elements like the headlamps from the Freight Rover and the taillights from its Maestro van.

Behind the hood, the Discovery 1 was offered with either a 2.5 liter Tdi diesel or the 3.5 liter V8 engines. in 1994 it was introduced in the US modified to comply with the strict US motor vehicle requirements. Improvements were further added like Bosch electronic emissions control, a more comfortable ride, a stronger R380 gearbox, larger headlights and a second set of lights on the rear bumper.

Other improvements were done to comply with newer European road safety standards. in 1995 a more powerful 3.9 litter V8 from the Range Rover SE model was used. its 1996 models and onwards were fitted with 4.0L engines had a few improvements that included a larger, cross-bolted main bearings, revised intake, pistons and a new distributorless engine management system called GEMS. 1998 saw the end of the Land Rover Discovery 1 life cycle to be replaced by the Discovery 2.