In: Operations Management
What are some long-term contracts that Ford Motors is facing as an investor need to know to make an investment? [200 words or more][Will give thumbs up]
Solution -
Ford is a multinational automaker established in Detroit from 1903. The company has its presence globally barring a few countries.The expansion of Ford has been done through many business tie-ups and partnership contracts. This information makes it necessary for the investors as it influences and determines the future growth of Ford. The major business tie-ups are as below -
1. Ford Joint Venture with Sollers - This is a Russian tie-up and has allowed Ford to expand profitably in Russia since the last 8 years. This partnership amounts to nearly 12% to the bottom line of the company.
2. Ford and Changan Automobile - This is a Chinese partnership that allows for production in China and capture 3% of the total market share of China.
3. Ford and India - Ford has been in India since 1998 but in 2019 a joint venture with Mahindra and Mahindra has allowed Ford to solidify ita position in India with a sale of over 100,000 units every year.
4. Ford has a subsidiary ownership in Europe which allows for sales across France, Gemany and UK. The Brexit agreement has influenced Ford and investors must take note of this as a major factor.
5. Ford and Volkswagen have come up with a world-wide partnership that allows them to share knowledge and market their products more aggressively in the market. In future this would continue to have a huge impact on investor's wealth.
The above are the major contracts that influence the revenue of the company and should be carefully reviewed by investors as a sway in these contracts can lead to heavy volatility in the market.