Ford Motor Company (NYSE:F) has been on an impressive run lately as the company benefits from an improved product portfolio, growing demand in key markets and strong financial performance. Even though the stock has risen by more than 90% in the last year, the bull ride is far from over for this iconic American automaker.
With its big fat profit margins, the F-Series provides Ford Motor Company (NYSE:F) with undisputed leadership in a key segment of the U.S. auto industry. This has been America´s bestselling vehicle for 36 consecutive years, and there is no slowdown in sight for this product as Ford Motor Company (NYSE:F) reported a 22% increase in truck sales for the first half of the 2013.
The average age of trucks on the road is relatively high at around 13 years, and housing activity is positively correlated with truck sales, so pickups will continue benefiting from an improving housing sector over the coming quarters. General Motors Company (NYSE:GM) is confirming the trend as the company is reporting healthy results in pickups too: Silverado sales gained 26% and Sierra sales rose 21% in the first half of the year.
The Fusion has been a big success for the company, not only in terms of sales, but also when it comes to improving consumers´ perception about the brand and the quality of the products that Ford Motor Company (NYSE:F) manufactures. The Fusion has won a considerable amount of awards: it has been named “Green Car of the Year,” “Best Car for Families,” and “Best Car for the Money” among other nice things. Building a widely acclaimed car is probably the best kind of free advertising a company like Ford Motor Company (NYSE:F) could hope for.
The Escape was named “Car of the Year” by Popular Mechanics, and international reception for the product has been encouraging too, so Ford Motor Company (NYSE:F) is planning to expand sales in Europe and Asia. If the company can internationally replicate the success it´s having in the US, the Escape could mean a big boost to Ford´s revenues in the middle term.
This has allowed Ford to gain share in the US car market, where Japanese competitors like Toyota Motor Corporation (ADR) (NYSE:TM) and Honda Motor Co Ltd (ADR) (NYSE:HMC) were ahead of American automakers in terms of quality not so long ago. In the first six months of the year Ford has increased its car sales by 11.8% versus a 2.7% growth for Toyota Motor Corporation (ADR) (NYSE:TM) and 6.9% for Honda Motor Co Ltd (ADR) (NYSE:HMC).
The company has done surprisingly well in Asia during the last quarter, operating profits in that region were $177 million versus a $66 loss in the second quarter of 2012 and a small gain of $6 million in the first quarter of this year. This was Ford´s best quarter ever in Asia, and an auspicating sign in terms of future growth prospects.
The company has been investing heavily and building new factories in the region, this is usually a drag on profitability due to elevated starting costs. But results seem to be validating Ford´s decision to bet on Asia: the company sold 27% more vehicles in Asia-Pacific during the last quarter, reflecting mainly the strong performance in China, where sales were up more than 40%.