McMahon has been with Ford since joining the company as a graduate trainee in 1987, occupying a variety of positions both in Ireland and abroad, most recently as National Sales Director based in Cork.
He replaces Eddie Murphy, who has taken the decision to retire at the end of the year, having completed 35 years' service with Ford, the last 14 as Chairman and Managing Director.
Commenting on his new role, McMahon said: "These are hugely exciting times for Ford as we head into the new year with an all new Mondeo and new Focus in our ranks.
"These two new additions complete what, I feel, is our strongest ever line-up of cars, while our range of commercial vehicles continues to dominate the market.
"The resurgence in the car market is another reason for optimism and we hope that sales next year will continue to grow back to their normal volume."
He added: "The motor industry was one of the sectors worst affected by the recession, so, long may the recovery continue."
