Over the last 10-years, Tesla has emerged from nowhere to become the largest automaker by market cap. This has a lot to do with the hype around electric cars, a market in which Tesla has a clear technical lead over competitors.
Despite these dynamics, one legacy carmaker seems to have emerged unscathed, and that’s Ford. This is evident in Ford’s rising revenues despite competition, and challenging times for both UK and U.S retail sales in 2021. This is a big deal because retail sales are an indicator of consumers willingness to spend, and on what goods and services. It shows that even at a time when U.S consumers have slowed down on spending, demand for Ford cars remains high.
Ford’s success has a lot to do with the strong brand equity of the Ford F-150. The Ford F-150 consistently ranks as America’s number one truck of choice. However, it is not just the F150 driving Ford. If Ford’s financials are anything to go by, there is no doubt that the entirety of Ford’s car brands are doing well. For instance, in Q4 of 2021, Ford missed its revenue targets due to microchip supply disruptions globally. Nonetheless, the company managed to sell 1.1 million cars, an indicator that the Ford brand is strong, and people trust the company’s cars.
What does this mean for Ford?
Ford continues to sell millions of cars, and some of its brands rank as a top consumer choices, indicating that Ford has strong brand equity. Ford could become the number one car maker globally, if it fine-tune its strategies to be more in line with consumer needs. In specifics, two key growth factors could take Ford to the top spot.
Pivot to electric cars
Tesla overtook legacy automakers due to its early entry into the electric car market. However, Ford, with its strong brand name, is also getting into this market. Ford’s electric car strategy is to run the EV division as a separate entity, more like a Ford startup. This move will allow the Ford EV division to have a more focused approach to EVs, translating to faster results.
What’s most interesting is that Ford uses its most popular brands as a Launchpad for the EV market. Currently, Ford EV flagships are the Ford F150-Lightning and the Mustang-Mach-E.
The Ford F150 is already one of America’s most loved car brands. By launching an electric version of it, Ford is likely to see demand soar among electric car lovers and see sales hit levels never tested before.
Similarly, the Mustang (American muscle) is one of the most iconic performance cars in the U.S. With an electric version, pro-environment performance car lovers are likely to start buying more of the Mustang. This could see sales hit new highs going into the future.
An aggressive push into the Chinese market
Thanks to its iconic brand that dates back over 100-years ago, Ford commands respect in all key markets across the globe. One of the most important markets where Ford is leveraging its brand name to drive growth in China.
China is one of the largest automobile markets globally and leads in electric cars. Ford has been investing heavily to tap into the market, and so far, it is bearing fruit. In 2021, Ford sold more than 600k cars in China, recording an increase of 3.2% compared to 2020.
One of Ford’s cars having a major breakthrough in the Chinese market is the Ford Lincoln. Due to Lincoln’s positioning as a top luxury car in China could find favor with China’s fast-growing wealthy and upper-middle-class, a factor that could quickly push Ford to become the number one car brand globally.
Ford is also tapping heavily into China’s love for electric cars and, as of October 2021, had started delivering battery-electric vehicles. Due to the enormous size of the Chinese electric car market and Ford’s strong brand, there is a good chance that it could emerge as the number one automaker in sales.
Recap
Despite Tesla’s seemingly unstoppable rise, Ford continues to be one of the most iconic car brands globally. The company’s F150 series regularly ranks among the top two car brands in America. Now that Ford is getting into electric cars and aggressively pushing into the Chinese market, there is a chance that its iconic car brands could take it to the top of the automobile market.
