The future of Ford (page 2 of 2)

All things being equal, we are predicting a strong second half recovery for the Gulf auto market, which will extend into the first few months of 2004."

In Ford's meetings with its regional dealers, company officials reiterated that there will be no easing up on the effort to gain market share, whatever the short-term consequences for the operating margins of the dealers and the manufacturer. According to industry sources, Ford intends to attain a 3,000-5,000 unit gain annually in each of the next three years, which should push its overall tally to 45,000 vehicles. And within the decade, Ford expects to be able to take on General Motors for the title of biggest regional seller of American cars.

A lot of the credit for Ford's improved fortunes in the region should go to Benintende, a consummate professional. He has worked in Ford's Dubai office for seven years - which is double the average length of service for senior company officials in the region.

Consider the Mideast launch of the Mondeo - Ford's bestselling model internationally. Earlier, Ford would have priced the mid-sized car in the UAE at the 52,000-54,000 dirham ($14,150-$14,700) mark, which would have placed it at a distinct disadvantage vis-à-vis Japanese makes in the same category. This time, a decision was made to bring the price down under the 50,000 dirham barrier. Early indications are that model is exceeding Ford's pre-launch expectations.

"No longer will Ford be content with introducing a model and hoping to get some fair numbers from it. Now, the intention is to aim for market leadership in a category or very close to it," said the Ford official from Saudi Arabia.

Apart from the Mondeo, Ford's great hopes are for the pricier Explorer and Expedition SUVs, and the legendary Mustang model. The two SUVs had a good run in the last two years. Lincoln limousines, having recently undergone a major revamp, are also racking up decent sales.

But the recent upsurge in anti-American sentiment in the region - further inflamed by the war in Iraq - has hurt sales for Ford and other US brands. According to industry sources, the Big Three American manufacturers have all taken hits on sales, especially in the small but volatile markets of Lebanon and Jordan. Even sales in the crucial Saudi Arabian market have been affected by anti-American sentiment among consumers.

The Ford official in the kingdom says that the problem is manageable, and points to the company's volume gains in 2002 as proof. "Buying a car is quite different from buying a cola or a burger," he insists. "Wider issues will not have the same level of impact when it comes to buying a car. If that were the case, no US car manufacturer would have been able to move any shipments in the region since the first Gulf War. Recent events will leave a temporary blip, nothing more."

Ford is not alone among the major manufacturers in believing that an upturn is just ahead - General Motors is planning 20 new launches over the next few months. Chrysler, which is running a distant third, hopes to put behind it a dismal 2002 in the Gulf with new launches of its
own.

The other brands owned by Ford - Jaguar, Land Rover and Volvo - all performed well in 2002, beefing up the group's bottom line. In an ambitious move, Land Rover is setting up a multimillion-dollar greenfield assembly line venture with a Jordanian partner. Units from these plants, which will obviously be cheaper than vehicles imported from outside the region, will be exported to some of the North African markets.

Volvo, which underperformed in the Middle East on its own, has blossomed in the last two years since coming under Ford's ownership. While Volvo is not about to take on Mercedes and BMW anytime soon, an expanded lineup helped the Swedish brand attain the 1,500 unit sales mark in 2002. Another strong year is predicted.

"The next two years will be crucial for Ford. It will be in this period that consumers will see the full benefits of our expanded offering," says one regional company official. "Ford is now set for the future like never before, and the Middle East is integral to it."