AFTER gracefully navigating through one of the most disastrous periods in the US auto industry’s history, the iconic Ford Motor Company (NYSE: F) has emerged as a formidable force to be reckoned with. This American multinational corporation is one of the world’s largest automakers based on worldwide vehicle sales. During the financial crisis, Ford was able to avoid filing for bankruptcy, the tarnishing fate that befell rivals General Motors and Chrysler Motors in 2009. Had the company been forced to file, the Ford family certainly would have lost their controlling interest in the company. Much of the success of the company can be accredited to the Chief Executive Officer Alan Mulally who has headed the company since 2006.

Under his leadership, the company has made tremendous progress. Notably, the implementation of Ford’s business strategy that is embodied in their One Ford plan, which is a four-point business plan geared at achieving success globally. These four points consist of: aggressively restructuring the company to operate profitably, accelerating development of new products, financing their plan while improving their balance sheet, and effectively working together as one team. Consequently, Ford has made a remarkable turnaround over the last few years, fuelled by disciplined adherence to the One Ford plan, resulting in the reinvention of the company as a highly competitive force in the global automotive industry.

Once known as an innovator in the automobile industry, Ford motor company has spent the last few years rebranding itself as a manufacturer of fuel-efficient and high quality cars and crossover vehicles as competition increases.

Ford is leading a major global shift to fuel efficient and functional utility vehicles, growing the sales of this segment faster than any other Ford vehicle segment in the past five years, and outpacing the industry average. In the United States, Ford’s Escape is the best-selling small utility vehicle, and the top-selling utility vehicle in its segment in Canada for nine consecutive years. Data provided by IHS Automotive indicate that global utility vehicle sales grew 35 per cent between 2005 and 2012. The segment now accounts for more than 13 million sales annually and 18 per cent of the global automotive market.

The automotive industry has gone through substantial changes over the last few years and there has been a major shift in focus towards emerging markets such as China, India and Brazil to re-stimulate growth. This shift presents a myriad of opportunities, such as the increased demand for different models. In emerging markets such as China, as the population becomes wealthier the demand shifts to high-end luxury brands and more affordable smaller cars. These are the two main areas where growth is occurring and Ford has capitalised on this.

Notably, the company delivered strong results in 2012, achieving 14 straight quarters of operating profit and four consecutive years of positive Net Income. Dividend payments resumed in 2012 after they were suspended for more than five years in order to cope with the impact of the global economic crisis. Last year, the company regained its investment-grade ratings from two ratings agencies, including Moody’s. The upgrade was driven by Ford’s strong market position and higher profitability in North America, a high cash balance, the ability to match production with market demand and sound operating and financial management. Furthermore, the iconic blue oval that was a part of assets pledged while securing a US$23.5billion loan in 2006 was released after the company’s successful turnaround plan was achieved.

The solid performance continued as they posted results for the quarter ending March 2013. Driven by the highest North American profit in more than a decade, Ford posted first quarter pre-tax profit of US$2.1 billion. Net Income attributable to the company increased 15.4 per cent to US$1.61 billion, driven mainly by a 10.49 per cent expansion in revenues to US$35.8 billion from US$32.4 billion, on the strength of new models.

Of note, the company’s stock price, which is trading at around US$15.98, has appreciated by 58.86 per cent in the last year, while paying a 2.5 per cent dividend.

Overall, the industry is in the midst of its fourth year of recovery from an economic downturn. Sales figures for April have been trending upwards as the company reported increased sales in various segments. The company’s car sales rose 21 per cent, utility vehicles were up 16 per cent and trucks were up 16 per cent. Meanwhile, developers are breaking ground on more new houses this year, boosting demand for trucks, and as a result increasing sales for the company. Rising consumer spending and a recovering housing market have buoyed demand for new vehicles.

Globally, vehicle sales are expected to rise significantly in the next few years, driven by accelerated expansion in developing markets, and continuous recovery in mature markets. Projections are for about eight million units to be sold by mid-decade, up approximately 50 per cent from 5.3 million units in 2010. The fast-growing Asia Pacific and African region will contribute about one-third of the company’s global sales by 2020, more than doubling the current percentage of global sales volume that was achieved in that region.

With the company’s prospect for growth, there is an opportunity for investors to benefit from capital gains while receiving dividends. Now is a good time for investors to consider Ford Motor Company as an addition to their portfolio.

Patrick Robins is a Wealth Advisor at Stocks & Securities Limited and may be contacted via probins@sslinvest.com