Lessons for Ford as it expands around the world.
A version of this article originally appeared on our US site, Fool.com.
WASHINGTON, DC -- Soon after the September 11th attacks were traced to terrorist training camps in Afghanistan, images of the Taliban sprinting around the country in Toyota (NYSE: TM.US) trucks began appearing on television. According to Wade Hoyt, Toyota's spokesman in New York at the time: "It's not our proudest product placement, but it shows that the Taliban are looking for the same qualities as any truck buyer: durability and reliability."
As Ford (NYSE: F.US) markets its new line of Global Ranger pick-up trucks to customers throughout the developing world, it'd be smart to keep this in mind. While American truck owners value aesthetics and towing capacity, those same characteristics carry less weight abroad. If it hopes to have success in these markets, it must forever purge the belief that Ford stands for "Found On Road Dead".
The indestructible truck
Toyota has sold over 13 million Hilux pick-up trucks worldwide since 1968, nearly cracking the top 10 best-selling vehicle models of all time. It was the first motor vehicle to make it to the magnetic north pole. The Toyota War between Libya and Chad was so-named because Hilux trucks were used as light cavalry vehicles. And it's the best-selling vehicle in the largest number of countries, taking the top spot in 34 including Chad, Iraq, Peru and Thailand.
The truck's popularity, particularly in underdeveloped countries, can be traced to a variety of factors. Its lightweight body and high ground clearance makes it ideal for off-road driving. It's fast, never breaks down and is strong enough to carry multiple passengers plus a heavy cargo load in the back. And because they're so popular, spare parts are widely available, and mechanics everywhere know how to fix them.
A 2003 episode of Top Gear offered a textbook demonstration of these characteristics by subjecting a 1988 Hilux with 190,000 miles on the odometer to a litany of abuses. It was driven down a flight of stairs, crashed into a tree, submerged in seawater, hit with a wrecking ball, set on fire, and finally placed on a high-rise apartment building which was then destroyed by controlled demolition. Despite suffering from severe structural damage, its engine was up and running again after only the most cursory of repairs.
Can the Global Ford Ranger compete?
Ford's early heritage makes it uniquely suited to vie for the hearts and pocketbooks of consumers in the developing world. With its Model T, the first automobile mass produced on an assembly line with interchangeable parts, Henry Ford sought to build a car for the masses:
"It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one -- and enjoy with his family the blessing of hours of pleasure of God's great open spaces."
While newer models ultimately eclipsed the Model T in terms of units sold, most notably the F series, Ford nevertheless managed to sell 16.5 million of them during a period in which car ownership was more of a luxury than a necessity. Like the modern-day Hilux, it was inexpensive to both buy and operate, reliable and built by a company with dealerships and trained mechanics spread throughout its territory.
Of course, whether Ford is able to reinvent its pedestrian roots with the Global Ford Ranger -- and thereby steal market share from the Hilux and General Motors (NYSE: GM.US), the latter of which is the top American car company in China -- remains to be seen.
Much of its 2011 Annual Report is dedicated to espousing the pillars of "One Ford", the company's newest mission statement, and articulating its strategy of relying on five global vehicle platforms, including the Global Ranger, for the majority of future revenues. In addition, according to the company, the truck itself combines "the toughness and capability of a pick-up with smart technology, outstanding safety, excellent fuel economy and high standards of quality and comfort".
The lessons of the Hilux
As Ford continues its global drive, it'd be well served to keep in mind the two qualities that truck drivers worldwide look for: durability and reliability. Indeed, that's the lesson of the Toyota Hilux. Even in this day and age of sophisticated global supply chains and mesmerising technological innovations, it's still the simple qualities that can make or break a company.
Are you looking to profit as a long-term investor? "10 Steps To Making A Million In The Market" is the latest Motley Fool guide to help Britain invest. Better. We urge you to read the report today -- while it's still free and available.
Further investment opportunities: