Analysis of Ford Motor CompanyExternal factors and economic environment1) Market and customersBetween 22% and 23% (last five year average) of Ford customers are defined as fleet customers as described above. The remaining 77-78% of customers are individuals who purchase Ford vehicles through authorized dealers. Ford customers come from all demographics given the diversity of the brand lineup and product line, and Ford products are bought and driven around the world. Argus Research estimates that the automobile market will decline by 3.8% in terms of units sold in 2003, and that light truck sales will increase by 0.2%. The company expects its car sales to decline 3.9 percent and its light truck sales to increase 0.7 percent in 2003. 2) Relevant Demographic and Social Trends Again, given that Ford is so diverse in its base of products and brands, it is rarely affected by demographic and social trends. Still, there are some trends that could impact Ford's sales mix. For example, as gasoline prices continue to rise around the world, consumers are abandoning gas-guzzling trucks and SUVs in favor of more compact vehicles such as the Ford Focus, Mondeo and Export. And, as the U.S. and European populations continue to age, older consumers are buying more traditional models such as the Saber and Taurus. But because the company's product line is both broad and deep, the company can capture lost sales in one segment by increasing its marketing and sales efforts in another. The flexibility of modern production lines also allows the company to quickly switch from one model to another in order to quickly respond to changing consumer demands.3) Impact of innovation and technical changeAn article by November 2001 in Bus...... middle of paper ......, these benefits are reversed - demand for cars and financing declines, and Ford Motor Credit is unable to generate increased profits with its loan portfolio. When exchange rates rise and more dollars are needed to purchase foreign currency, the relative price of foreign goods falls and people tend to buy more imported goods. Abroad, American cars are becoming more expensive. Foreigners will therefore buy fewer Ford vehicles. Ford is theoretically suffering a double whammy – however, as with the balance of payments case above, it is difficult to gauge the net effect on the company due to its high global diversity. If exchange rates fall, the effects reverse.