For the first time in 50 years, Ford has surpassed General Motors in total vehicle sales. This development is another indication of the changing global economy and the ripple effects of the economic crisis. Of the big three automakers, Ford, GM and Chrysler, only Ford did not require a bailout from the U.S., Canadian and Ontario governments. It is perhaps fitting then that Ford is being rewarded in the marketplace.
The Ford F-Series truck was the highest selling vehicle in Canada, not only for this past year, but for any vehicle in Canadian history. This may seem surprising, as many have believed that the trend will move towards smaller cars, but there are a few factors that account for the strong sales of gas guzzling trucks. Firstly, oil prices declined heavily during the economic crisis, which has led to low gasoline prices. Secondly, there have been strides made in fuel efficiency, even in terms of large vehicles, including SUVs and trucks.
Despite these advances, it is unlikely that Ford trucks will continue their dominance of the auto market, as oil prices have already begun to rise. There is simply no conceivable circumstance in which sales of trucks rise as gas prices rise. There will be inherent market pressures upon consumers to move to smaller, less costly vehicles.
Despite the possible loss of sales among the truck market, Ford is still well positioned to maintain its new number one ranking. The 2012 Ford Focus is a “world” model, meaning it is built on the same platform as the European Focus, which has been well received by consumers and critics. The domestic Ford Focus, sold in Canada and the United States, was previously considered “dumbed down” compared to the European model. The practise of selling different cars in Europe and North America came to an end beginning in 2006, when Ford CEO Alan Mulally moved Ford towards developing global vehicle platforms.
For now, however, Ford’s recent growth has been driven by large vehicles. The Ford Transit Connect commercial van saw a rise in sales of 252 per cent in 2010, while the Ford Escape and the luxury Lincoln MKX Crossover also saw sales increases of 35 and 44 per cent. This growth formed a big part of the 19 per cent increase in Ford sales.
Looking back to Canadian auto sales in years past, it is clear how far GM has fallen, and how much progress Ford has made. In the year 2005, General Motors sold twice as many vehicles as Ford in Canada. For General Motors to have fallen so far in such a short time is indicative of the severe effects their 2009 bankruptcy had upon their sales numbers. Even GM, however, appears to be on the slow road to recovery, as their sales increased 6.3 percent.
These trends, which are part of an overall increase in the auto market, signal two important factors. The overall auto market is recovering slowly, along with the rest of the global economy, which is being helped by (temporarily) low gas prices. The second important factor appears to be that Ford, and to a lesser extent GM and Chrysler, have learned from their near death experience and are finally beginning to build vehicles that are fuel efficient, reasonably priced and, most importantly, that live up to the quality that consumers have come to expect.
