Ford Motors Company is considering introducing the 2006 Ford Fusion model into the Pakistani market. The Fusion is a mid-sized sedan that would compete with models like the Honda Accord. Key advantages of entering the Pakistani market through foreign direct investment include increasing investment, reducing unemployment, and transferring new technology. However, Pakistan's unstable political system and changing policies could impact investment.

1. Ford Motors Company
International Business

2. Presented by:
M. Rizwan Qamar
2

3. Outline
 Brief Introduction of Ford Motors
 Overview of Pakistan Automobile Industry
 Mode of Entry in Pakistan
 Political Effects On Investment in Pakistan
 Model to be Introduced
 Overview and Features
 Comparison with Competitors
 Marketing Strategy
 Conclusion
3

4. Introduction
 Slogan: Bold Moves.
 Type: Public (NYSE)
 Founded: June 16, 1903
 Headquarters: Dearborn, Michigan, USA
 Revenue: $177.4 billion USD (2005)
Employees: 327,531
 Website: www.ford.com
Source: Annual Report Ford Motors Co. 2005
4

5. World Motor Vehicle
Production by Manufacturer
Source: World motor vehicle production by manufacturer: World ranking 2005.
Mazda
1285 BMW
1323
Mitsubishi
Names of Companies
1327
1934 Fiat
2072 Suzuki-Maruti
2617
Renault-Dacia-
2853 Samsung
Hyundai-Kia
1 3348
3373 Nissan
3375
Honda
4319
PSA Peugeot
5173 Citroën
6418 DaimlerChrysler
7100
Volkswagen Group
9040
Ford
0 5000 10000 Toyota
No. of Units ('000)
General Motors
5

6. World Motor Vehicle
Production by Country
Source: World Motor Vehicle Production by Country and Type: Light
Commercial Vehicles 2004 - 2005. OICA
995
Name of Countries
1110
1264
1406
1607
1783
2375
1 2624
2677
3495
3657
5067
5543
10064
11524
0 5000 10000 15000
Annual Production Units ('000)
United States Japan Germany
China South Korea France
Spain Canada Brazil
United Kingdom Mexico India
Russia Thailand Italy
6

7. Brief History
 Incorporated in 1903 with a paid up capital of
US$ 28000 by 11 investors
 Henry Ford 40 years old man Found this
company
 One of those companies which survive in great
depression
 1908 Released 1st T-Model car
 Introduces new HRM system which later on
called FORDISM
 1911 Ford opens first factory outside North
America – in Manchester, England.
7

8. History……….continued
 1918 50% of the county cars were T-Model
 Henry Ford Make efforts to Stop World War-I
 1919 loss market share when GM and Chrysler
offer new luxurious Models
 1922 acquire Lincoln Motor Company, named for
Abraham Lincoln in US$ 8 Million
 1925 introduces Ford Tri-Motor Airplane
 1926 Ford Australia was founded in Geelong,
Victoria, Australia.
8

9. History……….continued
 1927 introduce new luxury Model-A and
stop the production of Model-T after
producing 15 million units
 1930 establish Mercury division to serve
mid price auto market
 1938 Henry Ford was awarded The Grand
Cross of German Eagle- Highest award
given by the Germans to any foreigner
9

10. History……….continued
 1941 Ford begins building general purpose "jeep"
for the military
 1942 Production of civilian vehicles halted,
diverting factory capacity to producing B-24
Liberator bombers, tanks, and other products for
the war effort
 1947 Henry Ford dies of cerebral hemorrhage at
the age of 83, Henry Ford II becomes new
chairman
10

11. History……….continued
 1945 Lincoln and Mercury were combined into a
single division.
 1948 F-1 Truck introduced. Lincoln Continental
was introduced
 1956 Ford goes public with common stock shares
 1957-58 Ford was top selling brand, with 1.68
million automobiles produced per year
 1965 Ford brand US sales exceed 2 million units
 1967 Ford of Europe was established
11

12. History……….continued
 1970 Ford establishes Asia Pacific
operations
 1973 Ford US brand sales reaches an all
time high of 2.35 million vehicles produced
 1979 Ford acquires 25% stake in Mazda.
 1985 Annual turnover exceed 2.70 million
with a revenue of more than US$ 53 billion
 1987 Ford acquires Aston Martin Lagonda
and Hertz Rent-a-Car
12

13. History……….continued
 1989 Ford acquires Jaguar, and the Mazda
MX-5 Miata is unveiled
 1995 Annual revenues reached $137 billion
 1996 Ford certifies all plants in 26
countries to ISO 14001 environmental
standards
 1999 Ford purchases Volvo (car division)
 2000 Ford purchases Land Rover from BMW
13

14. History……….continued
 2003 Ford Motor Company 100th
Anniversary.
 2006 Ford buys Rover brand name from
BMW
Sources:
General Timeline: Ford Motor Company 2002 Annual Report
Production figures: U.S. Automobile Production Figures
14

15. Pakistan and its Automobile
Industry…………An Overview
 Pakistan is Situated between two biggest nations
of the world, India and China consisting of ¼
Population of the world
 It provides a strategic link to the Middle East in
the west, Central Asia in the north
 The country has a sizeable market of 160 million
people
 Its hard core workforce consists of over 45
million people, both men and women
 The literacy rate is 52 % with 68 universities and
1,164 colleges
15

16. Pakistan…………….Climate
 The country comprises a land mass of 796,095 sq
km, with one of the world’s highest mountains,
such as K-2 in the north
 Too vast deserts in the south, with arable plains in
the middle irrigated by five famous river systems
of the great Indus Valley
 Five seasons, namely winter, spring, summer,
Moon Soon and autumn are among the greatest
natural endowments of the country
16

17. Pakistan……….Infrastructure
 The country’s infrastructure is fairly well
developed, comprising an elaborate cross
country railways network, extensive road
linkages reinforced by motorways and
highways, seaports, airports and dry ports.
 A fully developed export processing zone
has been operating in Karachi since the
early 1980s
17

18. Pakistan…Infrastructure……….Continued
 Three new export processing zones are being
established in Sialkot, Risalpur and Saindak
 There are 72 industrial estates and three special
industrial zones in the country
 The country is fast exploring the brave new world
of information technology and keenly assimilating
the requirements of e-government and e-
commerce
Source: Mr. Yasin Tahir, Joint Secretary (Investment and
Engineering), Ministry of Industries and Production, Islamabad
18

19. Pakistan…Infrastructure……….Continued
19

20. Pakistan…….Automobile Industry
 The existing population of automotive vehicles in
Pakistan is 3.9 million
 The annual demand is estimated at 300,000
 2/3 of demand is being met from local sources
and imports and the remaining one third is left
unmet
 The market value of automotive vehicles in terms
of US$ is estimated at more than 1 billion
 Import constitutes around US$ 200 million
Source: Pakistan Automotive Manufacturers
Association 2001-2002
20

21. Pakistan…….Automobile Industry
21

22. Pakistan…….Automobile Industry
 The demand in the auto sector in Pakistan is
skewed towards small cars. Due to this
trend Pak Suzuki Motors enjoys a
monopoly in the small-car market.
22

23. Pakistan…….Automobile Industry
23

24. Pakistan…….Automobile Industry
24

25. Pakistan…….Automobile Industry
25

26. Pakistan…….Automobile Industry
26

27. Pakistan…….Automobile Industry
 Product characteristics
As the production of automotive vehicles is based
on foreign joint ventures of Japanese,
Korean and European origin, the product quality is
of international standard. The quality standards
being followed are mainly:
i) Japan Industrial Standards (JIS).
ii) Society of Automotive Engineers,
United States, (SAE)
iii) International Standards Organization
(ISO)
27

28. Pakistan…….Automobile Industry
28

29. Pakistan…….Automobile Industry
 The prices of locally manufactured
automotive vehicles are generally less than
the landed cost of imported vehicles
 In the domestic market the profit margins
are estimated at 10 % to 20 % of return on
equity (ROE)
29

30. Pakistan…….Automobile Industry
30

31. Govt. Investment Policy
 Liberalized Investment Policy
 No Upper Limit for Foreign Equity
 No restriction on remittance of Profits, dividends,
payment of royalty and Technical fee etc.
 Promoting Joint ventures, Co-Manufacturing and Co-
Exporting and technology tie-ups
 Abundant Land and Natural Resources
 Vast Human Resources
 Growing Domestic Market
 Well established Infrastructure
 Strategic Geographical Location
Source: Ministry of Industries and Production, Islamabad, 2001-
02 31

32. Mode of entry in Pakistan
 The mode of entry of Ford Motors
Company in Pakistan will be the Foreign
Direct Investment (FDI).
Following are the main advantages of FDI:
32

33. Advantages of FDI……...To Pakistan
 Foreign Direct Investment will be increased in Pakistan.
 Decrease in Unemployment
 Improvement in Foreign Exchange Reserves
 Local resources will be used in other productive industries
 Transfer of new Technology
 Customers can get the product of international level which
may not be possible in Licensing or Franchising.
 Increase in Growth Rate of GDP
 Helpful in boosting the Local Stock Market Index
Source: Economist Intelligence Unit's 2001
33

34. Advantages of FDI...…...To Company
 10 to 20% Return on Equity
 Cheap Labor and infrastructure as Compared with other
Countries
 A vast Market around the country
 Decrease in Production Cost
 Foreigners are allowed to open FX deposit Account in
local banks
 FX bearer certificates are Discounted
 Free from heavy excise duties
Source: "Economic Performance during 1999-2002," Ministry of Finance, Government
of Pakistan
34

35. Political Effect on Investment in
Pakistan
 Unstable Political System
 Unstable tariff and taxes policy
 Rapid change in Govt.
 Reshaping the Foreign Policy
 Politically federal countries attract higher levels of
FDI
 Lack of Consensus on Federalism affect
Macroeconomic Performance
Source: Nathan M. Jensen, 2006
35

36. Model to be Introduced
Ford Fusion 2006
36

37. Model Introduced……….Continued
 Production 2006—present
 Assembly Muridke, Pakistan
 Predecessor Ford Contour
Ford Taurus
 Class Mid-size
 Body style 4-door sedan
 Platform Ford CD3 platform
 Engine 2.3 L Duratec 23 I4
3.0 L Duratec 30 V6
 Transmission: 6-speed Aisin automatic
5-speed Mazda manual
5-speed Mazda automatic
37

38. Model Introduced……….Continued
 Wheelbase 107.40 in.
 Length 190.20 in.
 Width 72.20 in.
 Height 57.20 in.
 Win Total Quality Award in America
 30000 units sale in America in 1st Quarter of 2006
Source: Motor Trend magazine, (September 2006)
38

39. International Competitors
 Related Brands
Ford Edge
Lincoln MKX
Lincoln MKZ
Lincoln Zephyr
Mazda6
Mazda CX-9
Mercury Milan
39

40. International Competitors
 Similar Brands
Chevrolet Malibu
Honda Accord
Mitsubishi Galant
Toyota Camry
 Honda Accord is only the local competitor
in Pakistan
40

41. Comparison with Competitors
Features Ford Chevrole Toyota Honda
Fusion t Malibu Camry Accord
2007 2007 2007 2007
Base Price $18,155 $18,155 $20,775 $20,925
Destination $700 $650 $620 $595
Charge
Total $18,855 $19,380 $22,745 $21,520
Equipped
Price
41

42. Comparison with Competitors
Features Ford Chevrole Toyota Honda
Fusion t Malibu Camry Accord
2007 2007 2007 2007
Standard 5 5 5 5
Seating
Manual Air
Standard Standard Standard Standard
Conditioning
Manual 5-Speed Manual
Transmission With
Not Available Not Available Not Available
Transmissi Overdrive
on (Standard)
42

43. Comparison with Competitors
Features Ford Chevrole Toyota Honda
Fusion t Malibu Camry Accord
2007 2007 2007 2007
CD Player Standard Standard Standard Standard
Power
Windows Standard Standard Standard Standard
Power Door Standard Standard Standard Standard
Locks
43

44. Comparison with Competitors
Features Ford Chevrole Toyota Honda
Fusion t Malibu Camry Accord
2007 2007 2007 2007
Premium AM/FM AM/FM Radio AM/FM Radio
AM/FM Radio With 6 With Seek, Scan, With 160-Watts
AM/FM Radio
With 120-Watts
Speakers Total; 6- Speed Sensitive and 6 Speakers
Radio Disc CD Changer; Volume and 6 Total; CD Player;
and 6 Speakers
Total; CD
MP3 Player Speakers Total; MP3/WMA
CD Player Player
(Standard) Player (Standard)
(Standard) (Standard)
Horsepower 144@5600 158@6000 166@5800
@ RPM 160@6250
44

45. Comparison with Competitors
Features Ford Chevrole Toyota Honda
Fusion t Malibu Camry Accord
2007 2007 2007 2007
Rear Independent Independent Independent Independent
Suspension
Torque @ 156@4250 155@4000 161@4000 160@4000
RPM
Brakes (Rear) Disc Drum Disc Drum
45

46. Comparison with Competitors
Features Ford Chevrolet Toyota Honda
Fusion Malibu Camry Accord
2007 2007 2007 2007
Driveline Front Wheel Front Wheel Front Wheel Front Wheel
Drive Drive Drive Drive
Fuel Economy 23 24 24 24
City (mpg)
Fuel Economy 31 34 33 34
Highway
(mpg)
46

47. Comparison with Competitors
Features Ford Chevrolet Toyota Honda
Fusion Malibu Camry Accord
2007 2007 2007 2007
Wheelbase 107.4 106.3 109.3 107.9
(in.)
Front Head 38.7 39.9 38.8 40.4
Room (in.)
Front Leg 42.3 41.9 41.7 42.6
Room (in.)
47

48. Comparison with Competitors
Features Ford Chevrolet Toyota Honda
Fusion Malibu Camry Accord
2007 2007 2007 2007
Basic
(Miles) 36000 36000 36000 36000
Powertrain
(Months) 60 60 60 60
Powertrain 60000 100000 60000 60000
(Miles)
48

49. Marketing Strategy
 Target Market
Individuals having income level Rs. 100,000 and More which
includes:
• Industrialist
• Businessmen
• Bureaucrats
• High Profile Gentry
49

50. Marketing Strategy……….Continued
 Product
• Ford Fusion
• Near Luxury
• Passenger Volume 100 ft3 (4D)
• Luggage Volume 16 ft3 (4D)
• Fuel Type: Regular Gasoline
• Mileage MPG (combined) 26
• 5 or 6 volume Automatic speed
(Optional)
50

51. Marketing Strategy……….Continued
……………………………………………Price
Description Price in US$ Price in PKR
US$ 1= 60 PKR
Base Price $18,155 Rs. 1,089,300
MSRP
Destination $700 Rs. 42,000
Charge
Total Equipped $18,855 Rs. 1,131,300
Price
51

52. Marketing Strategy……….Continued
 Place
The distribution outlets will be situated in:
• All Major Cities
• Industrialized Cities
Established Markets
52

53. Marketing Strategy……….Continued
 Promotion
• Print Media
• Electronic Media
• Sign Board
• Direct Selling
53

54. Sign Board Design
54

55. Conclusion
 Fulfilling Unmet demand
 10%-20% ROE
 Established Infrastructure
 Local Content Requirement
 Easy access to capital
55

56. Thank You
56