It looks like Ford tomorrow will post a $1.2 billion first-quarter profit—the first time since 2005 the company has had four consecutive profitable quarters. Ford’s U.S. deliveries were up 37 percent through March, twice that of the industry as a whole.
One analyst said, “There’s a lot of momentum at Ford right now in terms of customers’ perception of their products.” Another praised its responsiveness to market changes in developing new products.
The Mulally strategy of repairing and revitalizing the brand seems to be working. But the company, even while it is doing quite well, is at a critical juncture. It needs to pay down debt while keeping the sales ball rolling with innovative products that people want. It also needs to keep the goodwill it has gained by not accepting government bailout money. And it won’t continue to benefit forever from Toyota’s debacles.
A big question now is whether the Fiesta (hatchback, right) will be as big a hit as Ford hopes. Reviews have been very positive, varying from ecstatic to mildly critical, and it sounds to me like the car is a great driver and very well put together and fitted out, though somewhat underpowered.
The ball is now in the buyer’s court: Will U.S. customers finally come around to well-conceived and constructed small cars? As Europe’s best-selling car, the Fiesta still has a case to make on these shores, where buyers have long resisted such vehicles. Ford is betting that the game has changed, that the recession and environmental change (and maybe common sense?) will convert more and younger prospects.
Cars like the 2012 Focus will be part of this picture, and finally we could see the European small car take hold. The Fiesta’s price, beginning at $13,995 MSRP, is certainly right.
Do you think the small-car market is finally becoming viable in the U.S.? Has Ford judged correctly?
*UPDATE: We reported yesterday, per Bloomberg, that the company would post a $1.2 billion first-quarter profit. Instead, it posted a $2.1 billion profit. While it still has some $34.3 billion in debt, this is an amazing accomplishment.