(By
Martin Hutchinson) Back in May I recommended that readers should buy shares in Ford Motor Co. (NYSE:
F) on the grounds that the U.S. carmaker would gain market share from the bankrupt General Motors Corp. (OTC:
MTLQQ) and
Chrysler Group LLC.
Ford's third-quarter profit and healthy October sales growth show I
called that one right. One doesn't like to blow one's own trumpet
excessively, but if you'd followed
my advice in May, you would today be sitting on a profit of nearly 50%.
However, while I admire Ford for its brilliant strategic decision
not to cave in and accept government-sponsored bankruptcy, and wish it
well in its future battles with GM and Chrysler, I'm not sure the
company that Henry founded represents the future for the global automobile industry.
More likely – while Chrysler will become a money-pit that is closed
only by political means, and GM will limp on as a smaller and
marginally profitable U.S. and European producer – Ford will slim down
to become a specialty producer of cars tailored to the tastes and needs
of the U.S. market. It's well known that the auto preferences of U.S.
consumers differ greatly from those of their European counterparts.
It comes down to this: Ford should be able to make money by limiting its "world car" ambitions and focusing on those needs.
Detroit Will Need to Learn From Asia
In the world as a whole, the big auto story has been the continued advance of manufacturers from China and India.
In China, the cheap-money policy of the People's Bank of China
has helped fuel a continued boom in automobile purchases, to the point
that 2009 vehicle sales in China will reach the 11 million mark –
making the Asian nation a bigger auto market than the United States.
In fact, even if China were to suffer a recession, that market is
likely to remain the world's largest long-term – despite the fact that
the U.S.
