Ford Raises The White Flag (F)(TM)(HMC)

Surrender before the battle is over. Things are going that poorly. Ford conceded that Toyota would pass it sometime next year pushing the US car company into the No. 3 spot.

The company’s downfall was hardly inevitable, nor was Toyota’s success.

Since Toyota’s share in the US market is over 15% now and growing, and Ford’s share is moving toward 14%, it will be hard for the American company to keep its slot.

Ford simply relied on pick-ups and SUVs for too long to fuel sales. It is as if Bill Ford did not see the trend to fuel efficient cars coming. He lost site of a rule of commodities markets. At some point they will rise when down, and being prepared is critical.

Ford and his managers essentially lost the company a reasonable chance to do well in the US.

Both Ford and Toyota say that their spot in the hierarchy of US sales is not important. But, share is often a key component of profit, so the talk is a little hollow.

Ford may now wish that it had tied up with Carlos Ghosn and his Nissan and Renault auto operations, or that another company like Honda would strike a strategic alliance. Even aftre raising over $20 billion, Ford looks like a rough long-term bet.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about