Yesterday, we took a look at automaker Ford (NYSE:F) and its public outcry over alleged "predatory" practices by Japanese rivals, such as Toyota (NYSE:TM) and Honda (NYSE:HMC). Ford, which currently produces roughly 20,000 hybrid Escape and Mariner SUVs per year, in comparison to Honda's 45,000 and Toyota's 250,000, is complaining that it can't get all of the supplies it needs because hybrid parts suppliers favor large-volume Japanese automakers.
Today, Ford made the curious announcement that, over the next five years, it intends to ramp up its own production of hybrids to 250,000 per year. Interesting. On the one hand, the company says it's stymied at 20,000 -- that it would like to build more hybrids, but it just can't get enough parts. On the other, it seems confident in its ability to obtain sufficient hybrid car parts, battery packs, and so on, to grow its production by more than 10 times in five years. I suppose I could chastise the company for talking out of both sides of its mouth. But I've got a word limit to work within, and there's a more interesting thought I want to lay out for Fools today: Toyota's role as a crystal ball showing Ford's future.
Toyota has been selling hybrid autos since 1997. Ford just started up last year with a hybrid Escape SUV. Meaning that Toyota had a seven-year lead on Ford, which entered this market in just 2004. Starting from a standstill, it took Toyota eight years to hit 250,000 in hybrid sales. Starting from its own standstill, Ford is aiming to hit 250,000 in sales after a total of six years.
This suggests there may be another dimension to the interpretation of Ford's announcement laid down by MarketWatch earlier today -- that "Ford still has a long way to go to catch industry leader Toyota Motor Corp., which previously set its hybrid sales target at 1 million by 2010." Certainly, if we make the leap of faith of assuming that both companies' 2010 estimates are accurate, Ford will continue to greatly lag Toyota in worldwide hybrid market share in 2010. But that gap may close faster than one might think. Toyota won't remain eight years ahead of Ford in perpetuity -- indeed, Ford has already shaved Toyota's lead down to six years.
If it takes Toyota five years to ramp up from 250,000 to 1 million units, it may, for example, take Ford only three or four years to accomplish the same feat. In other words, don't count Ford out of this race just yet.
Read more about Ford's hybrid strategy in:
Fool contributor Rich Smith has no position in any company mentioned in this article.
