Market Dumps on Ford's New Vision

Ford Motor Co. (NYSE: F) management and the car company’s new initiatives have been nearly ubiquitous the past few days. First with the goal of a fully autonomous car by 2021. Then the shifting of small car production to Mexico (which Donald Trump did not like). Also, a rock star video of company management. The markets have not been impressed. Ford’s shares have dropped over 4% in the five days, and 14% year to date (the S&P is up over 4% for the same period).

The reason for the drop is anxiety about Ford’s present, and the fact that its future endeavors look like those of many other large global manufacturers. Ford’s U.S. sales are up only 1.7% so far this year to 1,773,849. Ford brand car sales are down 11.3% to 478,777 for the same period. There is rising evidence that the recently red-hot American market has peaked.

Ford’s position in Europe is a very modest 6.6% of the EU market, and is not gaining. China is the world’s largest car market. Ford lags badly there well behind GM and Volkswagen. Ford’s market share is pegged below 4% well behind the two market leaders each of which has almost 15%. Every large car company is devoting substantial investment to catch pieces of the Chinese market. In the meantime, the growth of car sales in the country appears to have slowed.

Ford’s efforts to take a lead role in self driving and electric cars looks similar to those of many other car companies and additionally non-car firms which would like to move into these markets. CEO Mark Fields said an all electric car is coming, and will have a range of 200 miles. It will enter a crowded market, which recently added the General Motors Co. (NYSE: GM) Chevy Bolt EV.  In five years, all-electric cars will be a commodity.

The self-driving car business is so crowded that even a search engine company, Alphabet Inc. (NASDAQ: GOOGL), holds a lead position.

Ford’s stock is performing badly because management has not made the case it can pull away from the middle part of the global automotive field.