Sunday June 6 1:21 PM ET
Study: Ford To Pass Gm In Production
By Michael Ellis
DETROIT (Reuters) - The world's No. 2 automaker Ford Motor Co. (NYSE:F - news) will battle leader General Motors
Corp. (NYSE:GM - news) for vehicle production supremacy before emerging as the victor by 2005, according to a study to
be released Monday.
For the first time since 1930, when the Model A was still rolling off the assembly line, Ford will take the top spot in the number
of cars and trucks manufactured annually, while smaller automakers will feel increasing pressures to merge.
Ford production will grow to 9.15 million cars and trucks in 2005 from an estimated 7.77 million in 1999, beating GM with
9.10 million in 2005, up from 8.08 million in 1999, according to the study prepared by PricewaterhouseCoopers LLP unit
Autofacts.
''They're basically battling for number one back and forth between now and 2005,'' said Greg Bonner, who co-authored the
study with colleague Paul McCarthy. ''A minor shift in any one car line, which can occur in one year, obviously could throw
that one way or another.''
Autofacts estimates included figures from automakers controlled by another car company. For example, Mazda Motor Corp.,
33.4 percent owned by Ford, is included in Ford's total. Isuzu Motor Ltd., in which GM owns a 49 percent stake, is included
in GM since by Japanese law, a stake greater than a 33.4 percent share is considered controlling interest. Also, all of Saab
AG, 50 percent owned by GM, is considered in its tally since GM effectively controls the Swedish automaker.
Ford climbed to within striking distance of GM, and is even expected to overtake its longtime competitor in revenues this year,
with the $6.5 billion acquisition of Sweden's Volvo AG in January and strong demand for its truck products in its core U.S.
market. On the other hand, GM's share of the critical U.S. market has steadily eroded from 50 percent in the mid-1950s to
nearly 30 percent now.
Following a recent spate of mergers and acquisitions, fourteen global automakers now account for 94 percent of worldwide
production, with a top echelon of companies, dubbed ''The Global 6'' by the industry.
They include Ford and GM, Japanese automaker Toyota Motor Co., the combined Renault SA and Nissan Motor Co. Ltd.,
Germany's Volkswagen AG, and DaimlerChrysler AG (NYSE:DAJ - news) .
The others, labeled ''The Candidates Eight'' by Autofacts, could be plucked by a larger competitor or forced to merge with an
equal in order to compete in a shrinking global industry, Autofacts said. They include Honda Motor Co, BMW AG, both of
which have been eyed by larger automakers, as well as Fiat Spa, PSA Peugeot Citroen, Hyundai Motor Co Ltd and
Mitsubishi Motors Corp., which is looking for a partner.
''Without a merger or an acquisition, none of the smaller players from number seven on down could hope to compete in that
same league,'' Bonner said. ''These are the prey for the Global 6 because they just don't quite have the size necessary to shield
themselves from acquisition.''
Merger activity, which hit a feverish peak earlier this year with Ford-Volvo and Renault-Nissan, has slowed recently. But the
pace will heat up again during the next recession when many automakers which do not have the size, global reach or cash to
survive a major sales downturn must find a partner, Bonner said. |
