Ford Motor Company announced yesterday that president and CEO Alan Mulally will retire on 1st July, replaced by current COO Mark Fields.

Commenting on the outlook and implications, IHS Automotive senior analyst Stephanie Brinley said: ‘Mark Fields inherits a healthy company with strong product and profitability. As Fields is only 53 years old, Ford has appointed someone capable of holding the position for at least a decade, and providing long-term stability in senior executive management. Mark Fields brings significant experience in global markets, in turnarounds, and restructurings. This experience will assist as he meets the current Ford challenges, as well as provide the ability to address inevitable unforeseen issues and the natural cyclical nature of the auto industry.

‘Key issues facing the new CEO are largely the same facing the prior CEO, with some of those issues facing all the large OEMs: political pressures in Russia are making that market less stable; ongoing inflation and currency devaluation issues in South America (specifically Venezuela and Argentina) need to be carefully weathered; the critical launch of the F-150; and the continued development of Lincoln, most visibly with the launch in China later this year, but also with the ongoing job of building the brand back to a former glory. Fields’ prior experience with South America and Europe should serve him well in managing through those volatile situations as well as possible.

‘Ford’s trajectory in Europe is improving, with losses eroding and sales slowly improving in the region. However, that is also true for most automakers in Europe. As the region picks up steam, sales reports and earnings reports are expected to look better and better—barring unexpected economic shocks or reversals in current trends.

‘In the North American market, the most significant issue is the F-Series product launch. The current truck has share of about 38%, an increasing average transaction price and has worn the mantle of best-selling vehicle in America for 30 years. The 2015 truck will move to a largely aluminum structure, introducing complex new manufacturing processes as well as new technology to the stable and conservative segment. Ford is laying the groundwork well, addressing customers leading up to the launch by sharing elements of the story over time. However, several of Ford’s product launches over the past decade have been troubled, and any significant disruptions to this launch can cause significant short-term impact. Long term, however, assuming the product delivers on customer needs and demands, a poor launch could be recovered from. Ford is seeing some softness in small-car sales, in part from a planned reduction in daily rental fleet sales and in part as buyers shift to small SUVs. Ford is well-positioned for this shift, with an extremely competitive entry in the Escape and the Lincoln MKC arriving this summer to address the compact luxury SUV market. North America will remain Ford’s most significant market, accounting for 41.6% of global Ford brand sales in 2020—though gains in other regions are making the company much more diversified, and that number is down from 65.2% of sales in the year 2000.

‘Ford’s improvements in China indicate a solid future in the world’s largest automotive market. IHS Automotive forecasts that the Chinese market will account for 15.3% of global Ford brand sales in 2020, compared with 7.7% in 2010 and 14.2% in 2014.’

She concluded: ‘The impact of Alan Mulally on Ford really cannot be overstated. Whether anyone else could have created the level of change and delivered an equally strong execution is immaterial, as he was the one to do it. From the weekly global business overview meetings to the One Ford plan to ensuring Ford borrowed enough money to weather the downturn, as well as paying significant attention to grooming a leadership team ready to take over, Mulally has reshaped the Ford culture.’