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Ford pulls ahead of its rivals

By Alex Taylor
Octubre 7, 2010

FORTUNE -- General Motors and Chrysler are beginning to make some headway after getting a financial and operational overhaul compliments of the U.S. bankruptcy court. But Ford, operating free of interference by the court or the federal government is moving even faster and is beginning to put real distance between itself and its two domestic rivals.

Ford's U.S. sales in September rose 40% over a year ago, and it has gained retail market share in 23 of the last 24 months. By comparison, GM's sales rose 11% last month.

Meanwhile, Ford stock, which dipped below $3 per share two years ago, has risen to close to $13. Earlier this week, Morgan Stanley initiated Ford coverage with a target price of $20.

Wrote analyst Adam Jones: "Our forecasts give Ford credit for a transformational turnaround yielding performance far exceeding its own historical averages and places the company among a select group of global automotive firms. "

The momentum is likely to continue. After a slow start, Ford is beginning to take the wraps off a program to electrify its car fleet. By 2015, it expects that 2% to 5% of its global car fleet will be conventional gas-electric hybrids, plug-in hybrids, and all-electric battery-powered vehicles. In the year 2020, Ford expects the share to jump to between 10% and 25%.

Ford outlined its alternative fuel strategy nearly two years ago and is now able to show some tangible results. It brought a number of its battery cars to New York for test drives this week.

First to the market, it is launching a small battery powered van, the Transit Connect in 2010. Such vehicles are considered an ideal battery application because they tend to operate in fleets, simplifying demands for charging infrastructure, and they follow predetermined routes, reducing the incidence of range anxiety.

Next year comes the car that likely will be the centerpiece of Ford's EV efforts, at least in the short term: the battery-powered Focus. Ford is promising a range of 100 miles per charge, which will make it directly competitive with the Nissan Leaf. Ford plans to sell 15,000 to 20,000 Focuses a year.

A test mule provided for journalists neither contained the elaborate instruments that battery vehicles seem to demand, nor tested the promised range. But it started successfully, ran quietly, accelerated smoothly and successfully dodged through New York City traffic in a lap around Ford's West Side dealership.

The Focus exemplifies Ford's common-sense, spread-the-overhead approach to battery-powered vehicles. Rather than go through the expense of developing dedicated electric car models like the Leaf, it is adding electric powertrains to its conventional models in order to maximize economies of scale. That risks dampening consumer appeal, but it should pay off in sharply lower costs.

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