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Ford Motors Company  International Business
Presented by:        M. Rizwan Qamar                          2
Outline   Brief Introduction of Ford Motors   Overview of Pakistan Automobile Industry   Mode of Entry in Pakistan   P...
Introduction Slogan:         Bold Moves. Type:           Public (NYSE) Founded:        June 16, 1903 Headquarters:   D...
World Motor VehicleProduction by ManufacturerSource: World motor vehicle production by manufacturer: World ranking 2005.  ...
World Motor VehicleProduction by CountrySource: World Motor Vehicle Production by Country and Type: LightCommercial Vehicl...
Brief History Incorporated in 1903 with a paid up capital of  US$ 28000 by 11 investors Henry Ford 40 years old man Foun...
History……….continued 1918 50% of the county cars were T-Model Henry Ford Make efforts to Stop World War-I 1919 loss mar...
History……….continued 1927 introduce new luxury Model-A and stop the production of Model-T after producing 15 million unit...
History……….continued 1941 Ford begins building general purpose "jeep"  for the military 1942 Production of civilian vehi...
History……….continued 1945 Lincoln and Mercury were combined into a  single division. 1948 F-1 Truck introduced. Lincoln ...
History……….continued 1970 Ford establishes Asia Pacific operations 1973 Ford US brand sales reaches an all time high of ...
History……….continued 1989 Ford acquires Jaguar, and the Mazda MX-5 Miata is unveiled 1995 Annual revenues reached $137 b...
History……….continued 2003 Ford Motor Company 100th Anniversary. 2006 Ford buys Rover brand name from BMW         Sources...
Pakistan and its Automobile        Industry…………An Overview Pakistan is Situated between two biggest nations  of the world...
Pakistan…………….Climate The country comprises a land mass of 796,095 sq  km, with one of the world’s highest mountains,  su...
Pakistan……….Infrastructure The country’s infrastructure is fairly well developed, comprising an elaborate cross country r...
Pakistan…Infrastructure……….Continued Three new export processing zones are being  established in Sialkot, Risalpur and Sa...
Pakistan…Infrastructure……….Continued                                19
Pakistan…….Automobile Industry The existing population of automotive vehicles in  Pakistan is 3.9 million The annual dem...
Pakistan…….Automobile Industry                           21
Pakistan…….Automobile Industry The demand in the auto sector in Pakistan is  skewed towards small cars. Due to this  tren...
Pakistan…….Automobile Industry                           23
Pakistan…….Automobile Industry                           24
Pakistan…….Automobile Industry                           25
Pakistan…….Automobile Industry                           26
Pakistan…….Automobile Industry Product characteristics   As the production of automotive vehicles is based  on foreign jo...
Pakistan…….Automobile Industry                           28
Pakistan…….Automobile Industry The prices of locally manufactured automotive vehicles are generally less than the landed ...
Pakistan…….Automobile Industry                           30
Govt. Investment Policy Liberalized Investment Policy No Upper Limit for Foreign Equity No restriction on remittance of...
Mode of entry in Pakistan The mode of entry of Ford Motors  Company in Pakistan will be the Foreign  Direct Investment (F...
Advantages of FDI……...To Pakistan Foreign Direct Investment will be increased in Pakistan. Decrease in Unemployment Imp...
Advantages of FDI...…...To Company 10 to 20% Return on Equity Cheap Labor and infrastructure as Compared with other    C...
Political Effect on Investment in         Pakistan Unstable Political System Unstable tariff and taxes policy Rapid cha...
Model to be Introduced       Ford Fusion 2006                          36
Model Introduced……….Continued Production         2006—present Assembly           Muridke, Pakistan Predecessor        F...
Model Introduced……….Continued Wheelbase                    107.40 in. Length                       190.20 in. Width    ...
International Competitors Related Brands               Ford Edge               Lincoln MKX               Lincoln MKZ     ...
International Competitors Similar Brands              Chevrolet Malibu              Honda Accord              Mitsubishi ...
Comparison with CompetitorsFeatures     Ford      Chevrole Toyota     Honda             Fusion    t Malibu Camry      Acco...
Comparison with CompetitorsFeatures       Ford                Chevrole Toyota               Honda               Fusion    ...
Comparison with CompetitorsFeatures     Ford       Chevrole Toyota       Honda             Fusion     t Malibu Camry      ...
Comparison with CompetitorsFeatures     Ford                 Chevrole Toyota                        Honda             Fusi...
Comparison with CompetitorsFeatures      Ford          Chevrole Toyota           Honda              Fusion        t Malibu...
Comparison with CompetitorsFeatures     Ford          Chevrolet Toyota            Honda             Fusion        Malibu  ...
Comparison with CompetitorsFeatures     Ford     Chevrolet Toyota   Honda             Fusion   Malibu    Camry    Accord  ...
Comparison with CompetitorsFeatures     Ford     Chevrolet Toyota   Honda             Fusion   Malibu    Camry    Accord  ...
Marketing Strategy Target MarketIndividuals having income level Rs. 100,000 and More which   includes:              •   I...
Marketing Strategy……….Continued   Product           • Ford Fusion           • Near Luxury           • Passenger Volume 10...
Marketing Strategy……….Continued        ……………………………………………PriceDescription      Price in US$   Price in PKR                 ...
Marketing Strategy……….Continued Place The distribution outlets will be situated in:            • All Major Cities        ...
Marketing Strategy……….Continued   Promotion         • Print Media         • Electronic Media         • Sign Board        ...
Sign Board Design                    54
Conclusion Fulfilling Unmet demand 10%-20% ROE Established Infrastructure Local Content Requirement Easy access to ca...
Thank You            56
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Ford Motors Company

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Ford Motors Company

  1. 1. Ford Motors Company International Business
  2. 2. Presented by: M. Rizwan Qamar 2
  3. 3. Outline Brief Introduction of Ford Motors Overview of Pakistan Automobile Industry Mode of Entry in Pakistan Political Effects On Investment in Pakistan Model to be Introduced Overview and Features Comparison with Competitors Marketing Strategy Conclusion 3
  4. 4. Introduction Slogan: Bold Moves. Type: Public (NYSE) Founded: June 16, 1903 Headquarters: Dearborn, Michigan, USA Revenue: $177.4 billion USD (2005) Employees: 327,531 Website: www.ford.com Source: Annual Report Ford Motors Co. 2005 4
  5. 5. World Motor VehicleProduction by ManufacturerSource: World motor vehicle production by manufacturer: World ranking 2005. Mazda 1285 BMW 1323 MitsubishiNames of Companies 1327 1934 Fiat 2072 Suzuki-Maruti 2617 Renault-Dacia- 2853 Samsung Hyundai-Kia 1 3348 3373 Nissan 3375 Honda 4319 PSA Peugeot 5173 Citroën 6418 DaimlerChrysler 7100 Volkswagen Group 9040 Ford 0 5000 10000 Toyota No. of Units (000) General Motors 5
  6. 6. World Motor VehicleProduction by CountrySource: World Motor Vehicle Production by Country and Type: LightCommercial Vehicles 2004 - 2005. OICA 995Name of Countries 1110 1264 1406 1607 1783 2375 1 2624 2677 3495 3657 5067 5543 10064 11524 0 5000 10000 15000 Annual Production Units (000) United States Japan Germany China South Korea France Spain Canada Brazil United Kingdom Mexico India Russia Thailand Italy 6
  7. 7. Brief History Incorporated in 1903 with a paid up capital of US$ 28000 by 11 investors Henry Ford 40 years old man Found this company One of those companies which survive in great depression 1908 Released 1st T-Model car Introduces new HRM system which later on called FORDISM 1911 Ford opens first factory outside North America – in Manchester, England. 7
  8. 8. History……….continued 1918 50% of the county cars were T-Model Henry Ford Make efforts to Stop World War-I 1919 loss market share when GM and Chrysler offer new luxurious Models 1922 acquire Lincoln Motor Company, named for Abraham Lincoln in US$ 8 Million 1925 introduces Ford Tri-Motor Airplane 1926 Ford Australia was founded in Geelong, Victoria, Australia. 8
  9. 9. History……….continued 1927 introduce new luxury Model-A and stop the production of Model-T after producing 15 million units 1930 establish Mercury division to serve mid price auto market 1938 Henry Ford was awarded The Grand Cross of German Eagle- Highest award given by the Germans to any foreigner 9
  10. 10. History……….continued 1941 Ford begins building general purpose "jeep" for the military 1942 Production of civilian vehicles halted, diverting factory capacity to producing B-24 Liberator bombers, tanks, and other products for the war effort 1947 Henry Ford dies of cerebral hemorrhage at the age of 83, Henry Ford II becomes new chairman 10
  11. 11. History……….continued 1945 Lincoln and Mercury were combined into a single division. 1948 F-1 Truck introduced. Lincoln Continental was introduced 1956 Ford goes public with common stock shares 1957-58 Ford was top selling brand, with 1.68 million automobiles produced per year 1965 Ford brand US sales exceed 2 million units 1967 Ford of Europe was established 11
  12. 12. History……….continued 1970 Ford establishes Asia Pacific operations 1973 Ford US brand sales reaches an all time high of 2.35 million vehicles produced 1979 Ford acquires 25% stake in Mazda. 1985 Annual turnover exceed 2.70 million with a revenue of more than US$ 53 billion 1987 Ford acquires Aston Martin Lagonda and Hertz Rent-a-Car 12
  13. 13. History……….continued 1989 Ford acquires Jaguar, and the Mazda MX-5 Miata is unveiled 1995 Annual revenues reached $137 billion 1996 Ford certifies all plants in 26 countries to ISO 14001 environmental standards 1999 Ford purchases Volvo (car division) 2000 Ford purchases Land Rover from BMW 13
  14. 14. History……….continued 2003 Ford Motor Company 100th Anniversary. 2006 Ford buys Rover brand name from BMW Sources: General Timeline: Ford Motor Company 2002 Annual Report Production figures: U.S. Automobile Production Figures 14
  15. 15. Pakistan and its Automobile Industry…………An Overview Pakistan is Situated between two biggest nations of the world, India and China consisting of ¼ Population of the world It provides a strategic link to the Middle East in the west, Central Asia in the north The country has a sizeable market of 160 million people Its hard core workforce consists of over 45 million people, both men and women The literacy rate is 52 % with 68 universities and 1,164 colleges 15
  16. 16. Pakistan…………….Climate The country comprises a land mass of 796,095 sq km, with one of the world’s highest mountains, such as K-2 in the north Too vast deserts in the south, with arable plains in the middle irrigated by five famous river systems of the great Indus Valley Five seasons, namely winter, spring, summer, Moon Soon and autumn are among the greatest natural endowments of the country 16
  17. 17. Pakistan……….Infrastructure The country’s infrastructure is fairly well developed, comprising an elaborate cross country railways network, extensive road linkages reinforced by motorways and highways, seaports, airports and dry ports. A fully developed export processing zone has been operating in Karachi since the early 1980s 17
  18. 18. Pakistan…Infrastructure……….Continued Three new export processing zones are being established in Sialkot, Risalpur and Saindak There are 72 industrial estates and three special industrial zones in the country The country is fast exploring the brave new world of information technology and keenly assimilating the requirements of e-government and e- commerce Source: Mr. Yasin Tahir, Joint Secretary (Investment and Engineering), Ministry of Industries and Production, Islamabad 18
  19. 19. Pakistan…Infrastructure……….Continued 19
  20. 20. Pakistan…….Automobile Industry The existing population of automotive vehicles in Pakistan is 3.9 million The annual demand is estimated at 300,000 2/3 of demand is being met from local sources and imports and the remaining one third is left unmet The market value of automotive vehicles in terms of US$ is estimated at more than 1 billion Import constitutes around US$ 200 million Source: Pakistan Automotive Manufacturers Association 2001-2002 20
  21. 21. Pakistan…….Automobile Industry 21
  22. 22. Pakistan…….Automobile Industry The demand in the auto sector in Pakistan is skewed towards small cars. Due to this trend Pak Suzuki Motors enjoys a monopoly in the small-car market. 22
  23. 23. Pakistan…….Automobile Industry 23
  24. 24. Pakistan…….Automobile Industry 24
  25. 25. Pakistan…….Automobile Industry 25
  26. 26. Pakistan…….Automobile Industry 26
  27. 27. Pakistan…….Automobile Industry Product characteristics As the production of automotive vehicles is based on foreign joint ventures of Japanese, Korean and European origin, the product quality is of international standard. The quality standards being followed are mainly: i) Japan Industrial Standards (JIS). ii) Society of Automotive Engineers, United States, (SAE) iii) International Standards Organization (ISO) 27
  28. 28. Pakistan…….Automobile Industry 28
  29. 29. Pakistan…….Automobile Industry The prices of locally manufactured automotive vehicles are generally less than the landed cost of imported vehicles In the domestic market the profit margins are estimated at 10 % to 20 % of return on equity (ROE) 29
  30. 30. Pakistan…….Automobile Industry 30
  31. 31. Govt. Investment Policy Liberalized Investment Policy No Upper Limit for Foreign Equity No restriction on remittance of Profits, dividends, payment of royalty and Technical fee etc. Promoting Joint ventures, Co-Manufacturing and Co- Exporting and technology tie-ups Abundant Land and Natural Resources Vast Human Resources Growing Domestic Market Well established Infrastructure Strategic Geographical Location Source: Ministry of Industries and Production, Islamabad, 2001- 02 31
  32. 32. Mode of entry in Pakistan The mode of entry of Ford Motors Company in Pakistan will be the Foreign Direct Investment (FDI).Following are the main advantages of FDI: 32
  33. 33. Advantages of FDI……...To Pakistan Foreign Direct Investment will be increased in Pakistan. Decrease in Unemployment Improvement in Foreign Exchange Reserves Local resources will be used in other productive industries Transfer of new Technology Customers can get the product of international level which may not be possible in Licensing or Franchising. Increase in Growth Rate of GDP Helpful in boosting the Local Stock Market Index Source: Economist Intelligence Units 2001 33
  34. 34. Advantages of FDI...…...To Company 10 to 20% Return on Equity Cheap Labor and infrastructure as Compared with other Countries A vast Market around the country Decrease in Production Cost Foreigners are allowed to open FX deposit Account in local banks FX bearer certificates are Discounted Free from heavy excise duties Source: "Economic Performance during 1999-2002," Ministry of Finance, Government of Pakistan 34
  35. 35. Political Effect on Investment in Pakistan Unstable Political System Unstable tariff and taxes policy Rapid change in Govt. Reshaping the Foreign Policy Politically federal countries attract higher levels of FDI Lack of Consensus on Federalism affect Macroeconomic Performance Source: Nathan M. Jensen, 2006 35
  36. 36. Model to be Introduced Ford Fusion 2006 36
  37. 37. Model Introduced……….Continued Production 2006—present Assembly Muridke, Pakistan Predecessor Ford Contour Ford Taurus Class Mid-size Body style 4-door sedan Platform Ford CD3 platform Engine 2.3 L Duratec 23 I4 3.0 L Duratec 30 V6 Transmission: 6-speed Aisin automatic 5-speed Mazda manual 5-speed Mazda automatic 37
  38. 38. Model Introduced……….Continued Wheelbase 107.40 in. Length 190.20 in. Width 72.20 in. Height 57.20 in. Win Total Quality Award in America 30000 units sale in America in 1st Quarter of 2006 Source: Motor Trend magazine, (September 2006) 38
  39. 39. International Competitors Related Brands Ford Edge Lincoln MKX Lincoln MKZ Lincoln Zephyr Mazda6 Mazda CX-9 Mercury Milan 39
  40. 40. International Competitors Similar Brands Chevrolet Malibu Honda Accord Mitsubishi Galant Toyota Camry Honda Accord is only the local competitor in Pakistan 40
  41. 41. Comparison with CompetitorsFeatures Ford Chevrole Toyota Honda Fusion t Malibu Camry Accord 2007 2007 2007 2007Base Price $18,155 $18,155 $20,775 $20,925Destination $700 $650 $620 $595ChargeTotal $18,855 $19,380 $22,745 $21,520EquippedPrice 41
  42. 42. Comparison with CompetitorsFeatures Ford Chevrole Toyota Honda Fusion t Malibu Camry Accord 2007 2007 2007 2007Standard 5 5 5 5SeatingManual Air Standard Standard Standard StandardConditioningManual 5-Speed Manual Transmission With Not Available Not Available Not AvailableTransmissi Overdriveon (Standard) 42
  43. 43. Comparison with CompetitorsFeatures Ford Chevrole Toyota Honda Fusion t Malibu Camry Accord 2007 2007 2007 2007CD Player Standard Standard Standard StandardPowerWindows Standard Standard Standard StandardPower Door Standard Standard Standard StandardLocks 43
  44. 44. Comparison with CompetitorsFeatures Ford Chevrole Toyota Honda Fusion t Malibu Camry Accord 2007 2007 2007 2007 Premium AM/FM AM/FM Radio AM/FM RadioAM/FM Radio With 6 With Seek, Scan, With 160-Watts AM/FM Radio With 120-Watts Speakers Total; 6- Speed Sensitive and 6 SpeakersRadio Disc CD Changer; Volume and 6 Total; CD Player; and 6 Speakers Total; CD MP3 Player Speakers Total; MP3/WMA CD Player Player (Standard) Player (Standard) (Standard) (Standard)Horsepower 144@5600 158@6000 166@5800@ RPM 160@6250 44
  45. 45. Comparison with CompetitorsFeatures Ford Chevrole Toyota Honda Fusion t Malibu Camry Accord 2007 2007 2007 2007Rear Independent Independent Independent IndependentSuspensionTorque @ 156@4250 155@4000 161@4000 160@4000RPMBrakes (Rear) Disc Drum Disc Drum 45
  46. 46. Comparison with CompetitorsFeatures Ford Chevrolet Toyota Honda Fusion Malibu Camry Accord 2007 2007 2007 2007Driveline Front Wheel Front Wheel Front Wheel Front Wheel Drive Drive Drive DriveFuel Economy 23 24 24 24City (mpg)Fuel Economy 31 34 33 34Highway(mpg) 46
  47. 47. Comparison with CompetitorsFeatures Ford Chevrolet Toyota Honda Fusion Malibu Camry Accord 2007 2007 2007 2007Wheelbase 107.4 106.3 109.3 107.9(in.)Front Head 38.7 39.9 38.8 40.4Room (in.)Front Leg 42.3 41.9 41.7 42.6Room (in.) 47
  48. 48. Comparison with CompetitorsFeatures Ford Chevrolet Toyota Honda Fusion Malibu Camry Accord 2007 2007 2007 2007Basic(Miles) 36000 36000 36000 36000Powertrain(Months) 60 60 60 60Powertrain 60000 100000 60000 60000(Miles) 48
  49. 49. Marketing Strategy Target MarketIndividuals having income level Rs. 100,000 and More which includes: • Industrialist • Businessmen • Bureaucrats • High Profile Gentry 49
  50. 50. Marketing Strategy……….Continued Product • Ford Fusion • Near Luxury • Passenger Volume 100 ft3 (4D) • Luggage Volume 16 ft3 (4D) • Fuel Type: Regular Gasoline • Mileage MPG (combined) 26 • 5 or 6 volume Automatic speed (Optional) 50
  51. 51. Marketing Strategy……….Continued ……………………………………………PriceDescription Price in US$ Price in PKR US$ 1= 60 PKRBase Price $18,155 Rs. 1,089,300MSRPDestination $700 Rs. 42,000ChargeTotal Equipped $18,855 Rs. 1,131,300Price 51
  52. 52. Marketing Strategy……….Continued Place The distribution outlets will be situated in: • All Major Cities • Industrialized Cities Established Markets 52
  53. 53. Marketing Strategy……….Continued Promotion • Print Media • Electronic Media • Sign Board • Direct Selling 53
  54. 54. Sign Board Design 54
  55. 55. Conclusion Fulfilling Unmet demand 10%-20% ROE Established Infrastructure Local Content Requirement Easy access to capital 55
  56. 56. Thank You 56

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