Ford Motor Company (F): Do Not Wait to Buy

Page 1 of 2

Ford Motor Company (NYSE:F)If you’ve spent some time trying to find the next undervalued stock with a bright future, chances are you’ve at least scratched the surface of Ford Motor Company (NYSE:F)‘s stock. There’s plenty to be excited about between its sales success with new models, growing economies of scale, and its plan for the future in China. In Motley Fool’s quest to help the world invest better, I think it’s time to put in perspective how big the opportunity in China really is. Not only that, I’ll give some insight on how much this could grow Ford Motor Company (NYSE:F) revenues.

Just how big?
Let’s look at the remaining potential of China’s automotive market using cars to people ratio. In Europe there is one car for every two people while in China the ratio is one car for every 20 people. Looking at the three major markets – Europe, U.S., and China – sales in 2012 reached just over 12 million, 14.5 million, and 19.3 million, respectively. From here on out China’s growth is substantially larger as the car to people ratio narrows. In 2020 sales are estimated to be around 15 million, 20 million, and 31 million, again respectively. So over the next seven years China is essentially creating a market the size of Europe. That’s a welcome notion for investors since the real Europe market is currently imploding.

Ford’s plan
This isn’t new information to automakers who are all racing to get their piece of China’s growing pie. Ford Motor Company (NYSE:F) is spending upwards of $5 billion in the region to meet its goal of doubling its market share from 3% to 6% by mid-decade. Last year Ford set a sales record in China topping 625,000 units sold – up 21% from 2011. Let’s assume Ford simply meets its 6% goal, and to be cautious we’ll say it even takes five years longer than expected. That would bring its 2020 sales in China to 1.86 million units – more than triple today’s levels. Ford plans to execute this with a slew of new models that have garnered much interest from Chinese consumers.

“Record 2012 sales highlight the positive response our customers have for our full portfolio of high-quality, safe, fuel-efficient and smart vehicles,” said John Lawler, chairman and CEO of Ford Motor Company (NYSE:F) China. “Their enthusiasm for Ford cars validates our aggressive plan to introduce 15 new vehicles, double production capacity, and double our China dealership network—all by 2015.” Here’s something I found very interesting.

China doesn’t want Chinese
Ford remains well behind rival General Motors Company (NYSE:GM) and Volkswagen market share in China. Of the 10 top-selling vehicles, four models are Volkswagen’s, three are General Motors Company (NYSE:GM)’s and only one is a Ford Motor Company (NYSE:F) – albeit the Focus is China’s most popular model. Ford has a chance to gain market share a little faster because Chinese consumers remain unimpressed with domestic brands and are avoiding a “Made in China” label. A study by Sanford Bernstein showed Chinese automakers market share declined to 26% in 2012.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!