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Ford To Strengthen Product Lineup

By Zacks Investment Research on August 8, 2009 | More Posts By Zacks Investment Research | Author's Website

The Ford Motor Company (F) released its product acceleration plan, which is being driven by an efficient global product development system, significant structural cost reductions and disciplined cash management.

Ford plans to replace or refresh from 70% to 90% of its lineups by volume in each of its three largest markets - North America, Europe and Asia-Pacific-Africa - by 2012. The lineups will be further refreshed from 140% to 160% by 2014.

Ford plans to focus on fewer but higher-volume platforms. The company aims to enhance its volume per core global platform from the present 345,000 to 680,000 vehicles within five years.

In 2009, Ford refreshed 45% of its vehicle lineup by volume in the U.S. The company now looks forward to rollout products such as the new Ford Fiesta, 2010 Ford Taurus, 2010 Transit Connect, 2010 Fusion, Fusion Hybrid and 2010 Lincoln MKT in the nation.

Ford has also launched Ford Transit Connect, Ford Ranger and Ford ECOnetic in the European market. It will also introduce its EcoBoost engine technology in Taurus SHO, Lincoln MKS, Ford Flex and all-new Lincoln MKT crossover vehicle soon. Ford has also set the next generation Focus for a global launch in 2010.

Overall, the product refreshment program is expected to reduce the age of Ford’s global product portfolio by 20%. Ford strongly believes to breakeven or be profitable on a pre-tax basis by 2011, driven by the program as well as the cost and debt reduction initiatives.

We recommend the shares of F as Neutral.

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