Professional Documents
Culture Documents
Henry Ford designed his first moving assembly line in 1913 Wheels for the world-the motto behind popularization of cars Each section of the production process was divided into component parts Combination of precision, continuity, and fastpaced brought the world mass production In Highland Park, Model T production reached record levels, every day a car came of the assembly line every ten seconds
Toyota's history began at the end of XIX century Sakichi Toyoda invented Japan's first power loom which revolutionized the countrys textile industry Two years later, he founded the company Toyoda Automatic Loom Works Toyody Sakichis son, Kiichiro Toyoda invested 100,000 pounds in the creation of Toyota Motor Corporation in 1937 (TMC) Sakichi Toyoda received this money for selling the patent rights to an automatic loom
FORD
The fourth-largest automotive company in the world in terms of sales Sells cars on 6 continents Car Brands: Ford, Mercury, Lincoln and Volvo
Since the mid-90s Ford continually loses significance in the American market Over the same period steadily increases its share in the European market Reasons for the gap between the development of the brand in the U.S. and Europe:
high labor costs in the U.S. high expenditure on healthcare in the U.S. strong trade unions in the U.S. (high pension commitments) strong economic growth in lower combustion cars
TOYOTA
The
biggest carmaker in the world in 2009 (more than 7.5 million cars) Main markets are Japan and North America, but recently we can see a strong growth in Asian and South America markets Toyota has three brands: Toyota, Lexus and Scion
Dominance of large cars: SUVs, Pick ups Rapid fluctuations in oil prices and legislators striving to reduce consumption of materials led to reorganization Restructuring of the three production lines for production of more economic models in Europe (Mondeo, Focus etc.)
Ultimately, Ford intends to make engines in all their models to be more economical In 2009 to market were introduced four hybrid models based on technology leased from Toyota
Ford Focus Hybrid is a direct threat to so far the most popular Prius (hybrid line of Toyota)
In 2010, the company plans to spend an additional $450 million to develop electric motors By 2012, Ford wants to produce own hybrid technology and plug-ins
Ford has invested more than $550 million in restructuring its manufacturing facility in Michigan
Toyota as one of the first ones started a hybrid cars production line (including leasing its technology to Ford) At present, hybrid Toyota - Prius line, represents approximately 73% of all hybrid vehicles sold in the U.S. So far in the U.S. Toyota sold the 1,000,000+ hybrid cars In addition, Toyota announced its intention to manufacture electric cars with lithium-ion batteries Toyota Plug-HV
Despite the very large amount of cars produced, so far Ford has derives small economies of scale by applying a separate, independent technologies and models for European, US and developing markets One Ford changed approach
Ford moves the emphasis to universal models for use in different regions of the world (the first "world car"-new Ford Fiesta)
sales on installments without interest charged discounts promotions combined with a loan
in recent years, sales in the U.S. were strongly associated with the property market it is estimated that in California, 30% of car purchases has been financed with a mortgage
Ford is mainly engaged in the American market, which slowly begins to lose its attractiveness Fords task now is to develop a universal line for use in every country (European Ford Fiesta in the U.S., Ford Transit Van in Asia) Whether european car models will be appealing to clients in India or Brazil depends the future of Ford in the long term.
Several serious flaws in the models has significantly hurt Toyotas image
in 2009, the company had to withdraw from the market 3.8 million vehicles due to the acceleration system flaw it is estimated that due to defects and withdrawals Toyota models suffered losses of $ 3 billion in 2010 over the past year, throughout the world over 9 million vehicles have been withdrawn for consideration more than 30 lawsuits are waiting
current crisis has significantly hurt the reputation of the company competition has used well (Chrystler, Ford and Honda hasorganized the promotions, giving discount on a new car for customers who got rid of the old Toyota)
Car Sales in highly developed countries will fall and remain at low levels
The biggest outlays directed on emerging markets mainly Brazil, Russia, India, China (BRIC) countries
Toyota earlier than other companies in the sector began to invest in the development of appropriate infrastructure and brand awareness in the above countries in 2009 Toyota announced the beginning of motor vehicle production in India (the company Toyota Kirloskar) in 2010 Toyota plans to produce 100,000 cars in the new factory opened in India
Japan
USA
USA
hybrid legislation
USA introduces new law to encourage development of hybrid technologies at present, when buying a car you can count on the hybrid tax relief of up to $ 3,400, depending on the amount of car sales (the more cars the company sells the smaller the deduction ) the aim is to support companies desiring to enter the market with hybrid technology
World Market
demand for cars will depend on the trend in oil, steel and aluminum prices
Risk factors
FORD
Ford is exposed to various kinds of risk not only to the market risk
currency risk, commodity price changes, interest rate risk, financing risk, risk of extraordinary events are just some of the most important kinds of risk present risk of loss of liquidity: hedge against it by sale of receivables (securitization), issue of debt and bank loans insurable risks: the loss (damage) of property, civil liability companies insure themselves privately they use derivatives to hedge currency, interest rate or change in commodity prices risk by forwards, swaps, options
does not use derivative to speculate
TOYOTA
changes in exchange rates interest rates availability of materials changes in prices of materials
forward contracts currency and interest rate options swaps
Unfortunately, Toyota does not protect itself from price changes and changes in supply of materials
Toyota settles its invoices in Japanese yen which increases its currency risk Changes in exchange rates reflect very strongly on company results
change in the dollar-yen exchange rate of 1% will change revenues by about $42 million
Toyota protect itself from risk with the help of swaps and futures Despite this, the company is unable to protect itself from a falling demand for exports of Japanese cars due to a change in exchange rates
Ratio analysis
Debt ratio
Debt ratio Toyota Ford 2006 0,62 0,62 2007 0,61 0,60 2008 0,64 0,71
Investing
Financing
Investing
Financing
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SWOT analysis
FORD
Strengths Hybrid technology Well-known brand in the USA Weaknesses: Weak sales results Inability to accommodate products
to changes on the market
TOYOTA
Strengths Hybrid technology Ability to cope in crisis Weaknesses: Lack of protection against changes in prices and demand
Opportunities: Promotion of economical and ecology-friendly cards In crisis, lesser importance of competitors