Maybe Ford’s Future Isn’t as Rosy as We Thought

2012 Ford Focus

Go to Ford’s campus in Dearborn, Mich., and try to find someone who isn’t smiling.

The company recently reported its best annual earnings since 1998, making 2011 the second most profitable year in the company’s 109-year history. After all the money was tallied, Ford’s net income for 2011 came in at $20.2 billion.

All the details you care to know about Ford’s financial situation can be found in a detailed CNN Money story.

In addition to the huge amounts of money rolling in, the company’s F-Series trucks still remain in the number one spot after 35 years. The new Fusion continues to generate positive reviews, and overall vehicle quality and company reputation is up. There just doesn’t seem to be anything stopping Ford right now.

Except there could be one tiny little problem.

Ford CEO Alan Mulally

For a company to reach elite status, it simply must provide a long-term positive experience for owners. Much of that is tied to how well a car holds its value over the years. When it comes time for owners to sell, they want their used cars to be worth big bucks. Toyota and Honda vehicles have always been the leaders in holding value, while American cars typically dropped in value like the Las Vegas housing market in 2009.

So while everything for Ford looks good on paper right now, there’s something that could seriously impede on those future values:

Fleet sales.

Forbes says Ford tops all automakers when it comes to fleet sales. That’s not good, because fleet sales are much less profitable in the short term and they hurt resale values in the long term. The magazine says Ford sold 32 percent of its vehicles into fleets last year, which could wreak havoc when owners of 2011 and 2012 Fords go to sell them in a few years. The model with the most fleet sales was the 2012 Focus. An incredible 45 percent of those were sold into fleets.

In light of all those fleet sales, is Ford becoming too arrogant about its financial success?


Find Used Cars in Your Area at CarGurus

Used Ford Fusion
Used Ford Focus
Used Ford F-150

Leave a Reply

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.