Filed under: International markets, Bad news, Products and services, Management, Industry, Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Marketing and advertising, Toyota Motor Corp. (TM)

Troubled car maker Ford Motor (NYSE: F) today saw its stock fall to lows not seen since way back in 1986, as traders continue to express concerns over the company’s capability to compete with its rival Toyota Motor (NYSE: TM).

Yesterday, Wall Street got the bad news that many of us had been anticipating but hoped never to hear: for the first time since 1931, Ford lost its grip on the number two ranking for U.S. auto sales in 2007. The company showed a massive 12 percent drop for the year, and has been replaced by Toyota as the second best-selling auto maker in the United States. Shares have tumbled, hitting an intraday low of $6.00 a share, which is the lowest the stock has traded in more than 20 years.

Just how hard has the company’s market value degraded over the past decade? Think about this… in 1998 the company boasted a $68 billion market value, compared with its current value of “only” $13 billion. This is definitely a tough time for the vehicle maker which less than a decade ago was responsible for 25 percent of all new automobiles sold in the nation.

Ford, which has historically relied on the strength of its truck division, is definitely struggling to get back on top as even its truck sales seem to be in free fall. During 2007 alone, sales of its top line of trucks, the F-Series pickups fell by 13 percent as tougher competition in the automobile niche continues to mount.

The struggling Detroit auto maker is still looking to return to profitability in 2009, but you really have to wonder just how feasible this goal is considering the difficulty the once strong auto company has keeping up with the rest of the pack.

While it is definitely shocking to see a foreign vehicle maker surpassing the American Ford Motor, it really should not be too surprising. It seemed like only a matter of time before this became the inevitable event we’ve all been waiting for. If you look at worldwide auto sales, Toyota has held the number two position since back in 2003.

If you ask me, America’s other major auto maker, General Motors (NYSE: GM) had superior keep a close eye on Toyota. Toyota is definitely a force to be reckoned with, and if GM isn’t careful, it could be giving up its coveted top spot before long.

During 2007, GM still was able to outsell Toyota by over a million vehicles, but its share was down six percent. GM sold 3.82 million automobiles, to Toyota’s 2.62 million (48,226 more than Ford). Worldwide, General Motors is in danger of falling to number two during 2007, but we will not get Toyota’s worldwide figures until later in the month.

What do you think? Is GM in danger of falling victim to Toyota? If you were in the vehicle market this day, what dealer lot would you visit first? Ford, GM, Toyota? Let us hear what you think.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer

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This entry was posted on Saturday, January 5th, 2008 at 5:53 am and is filed under Marketing and Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.