Cars and Drivers

Ford Woes Continue

Douglas A. McIntyre

Published: January 28, 2023 11:30 am

Ford’s stock has jumped almost 15% in the last month. It is worth remembering that this was from a nearly two-year low. Ford was hit with a bit of bad news recently. It recalled 462,000 vehicles for rear camera problems. In the next few months, Ford faces hurdles. The first is that its reputation for poorly built products will continue to dog it. The other is that a recession will undermine sales. (These are the least reliable cars in America.)

Ford’s product quality is something CEO Jim Farley has mentioned. He has pointed out that the fixes for the challenge may take years. However, it cannot afford this to continue, particularly as it moves into the hugely competitive EV market. This market is already crowded, and Tesla’s recent success and optimistic forecast for 2023 sales show its leadership position is cemented, at least for the next year.

Ford’s competition goes well beyond Tesla. Every major car company in the world is racing toward an EV-saturated future. Ford has two EV products that show promise. The F-150 Lightning and Ford Mustang Mach-E capitalize on two of Ford’s iconic brands. Ford will need dozens of other EV models in place to have a chance to be a leader in the industry. (These are the cheapest electronic vehicles you can buy.)

There are already ominous signs that the car market is weakening quickly. Americans have fallen behind on car payments at a level worse than the one in 2009, which was the bottom of The Great Recession. Subprime loans have shown particular weakness.

The car loan credit crisis will worsen due to high-interest rates, rapidly rising car prices, inflation, and an economy that has started to shed jobs.

Ford management can take little comfort that many of its rivals will be slammed by the same problems. Being on a list of companies that face poor results is not much of a prize.