, thus forming Daimler-Chrylser. These consolidations have proved beneficial to consumers since companies have been able to reduce costs and pass those savings on to the customers. Some of the other major examples of consolidation are Nissan

th Africa, and South America. In America, a current trend is for the neighborhood car dealer to be purchased by a large manufacturer, such as GM, so cars can be sold through retail outlets. Other future endeavors include low emission cars, which are expected to provide expansions in sales. Some major automakers are investing in fuel cells, devices that convert liquid hydrogen into electricity, hoping to make future vehicles more environmentally friendly. The automobile industry will see more changes in the next 10 years than it has in the last 100. Economic Climate In the past, the oversized vehicle was the body-style of choice among American consumers. In the 1970;s, oil shortages led to an increase in demand for more fuel-efficient cars, thus the sub-compact car became popularized. After 1979, Japan’s efficiency at producing this type of car allowed them to take 30% of the U.S. automobile market away from American manufacturers. In 1999, total industry sales have risen!

selling off a controlling 37% interest to Renault; General Motor;s 49% ownership of Isuzu; and Ford;s 33% majority of Mazda. Other efforts to become more competitive have translated into the European Union dropping trade barriers and European carmakers employing cost reducing efforts. American manufacturers have seen 2-3% growth over the last few years. Some current trends are the explosion in popularity of the Sport Utility Vehicle (SUV) and big luxury vehicles. In the future the global car market is full of potential. There are currently 44 million vehicles and by the year 2002 experts estimate that number will grow to 64 million. That growth is not expected to be in the US, rather in countries such as: China, India, The Pacific Rim, Sou!

h-American consumers in higher income brackets are choosing, with increasing frequency, to put SUV’s in their garages. Minivans market share was 8% in 1998, which was down 12% from 1991. This is a result of a shift in consumer demand away from these vehicles. Overall market analyst consensus is that minivans have entered the mature stage of the product life cycle. Pick-up trucks, uniquely American vehicles that span all of the consumer target markets, show good potential for domestic manufacturers. US. Manufacturers have sustained unparalleled sales in this segment due to the popularity growth of trucks. The largest and most important product segment in the automotive industry is mid-size cars. It is an area of intense competition for car sales in the United States. Popularity for mid-size vehicles is due to consumers’ preference for luxury cars they cannot afford and compacts that they do not like. All of these vehicle segments combine to form an industry in which consumers have continuously changing tastes. Recent years show that, for those manufacturers who can compete worldwide, profit and growth potential will be ever present. The company who is able to produce vehicles incorporating the most recent technologies at the lowest cost will find themselves with the competitive advantage. Firm Analysis General History of Ford: Ford Motor Company’s first car was sold on July 23, 1903. In 1906, the first Model T was made available and the millionth car was produced on December 10, 1915. Production of trucks and tractors began in 1917. Ford became the first international company when they started exporting cars to Europe. Within 10 years Ford had plants in 5 countries. In 1956, Ford went public with the largest stock issue of all time; 10.2 million shares. The Ford family still retains 34% of the firms voting stock. Ford’s finance subsidiary, Ford Motor Credit, was formed in 1959 and is the number one auto finance company worldwide. The Thunderbird, a two-seater sports car, was produced in 1954. A revolution

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