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Ford Can Credit Profit To Product Mix

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On: Wed, Apr 27, 2011 at 1:24PM | By: Tim Healey

Ford Can Credit Profit To Product Mix

Ford had a strong profit for the first quarter of 2011, and a strong product portfolio is a big reason why.  It's not just new models, but that's one of the biggest factors in Ford's turnaround. Those new models led to higher sales, rising transaction prices, and a stronger performance in Europe.

As we noted yesterday, Ford's product mix is a big reason why the company has done so well in the first quarter, despite high gas prices and other challenges.

We mentioned that the redesigned Explorer and the new Fiesta had a lot to do with Ford's success, but that's not all. Ford also redesigned its F-150 pickup trucks for 2011, offering more fuel-efficient engines, and sales of that model rose 23 percent, as the customers began replacing their aging vehicles.

Other products that may have figured into the mix could include the 2011 Ford Mustang, the Fusion sedan (especially its hybrid model, and the revamped Edge crossover. Ford has been making its lineup over during the past few years, and there's no doubt those efforts have paid off in profits.

The company is also looking to reduce debt, so the first quarter numbers are helpful. And that's where upcoming models like the redesigned Focus and new C-Max come in. These models bring buzz to Ford showrooms, and if they deliver on what they promise, they will bring more customers in, thus increasing profits and cutting into debt.

This author has long argued that product is the king in the automotive world, and that the best way to succeed is to offer the best products. Ford has been offering strong products for several years now, which has allowed the company to compete with Toyota and Honda while giving Ford a reputation boost.

Most importantly, it's also allowed Ford to compete with equally strong offerings from its rival Detroit automakers, both of which have been undergoing their own product comebacks.

Ford's success in the first quarter of 2011 isn't due to just one factor. But product is a strong factor, and it may be the most important one. The company will still need to show that it has improved its long-term quality, and it will face the same market challenges (rising fuel prices, supply disruptions in Japan) as its rivals. On top of that, most of the competition offers strong product portfolios, as well. But Ford remains well positioned to sustain its momentum.


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