Ford sees 'flat' market share in '03, marketing official says - Ford Forums

Stacy94PGT · 12-18-2002, 23:43

December 19, 2002
BY BILL KOENIG
BLOOMBERG

Ford Motor Co. expects market share for its Ford, Lincoln and Mercury brands to be "relatively flat" in 2003 after falling this year, the company's top North American marketing executive said.

The brands had a combined 20.3 percent of the U.S. market through November, down from 22.1 percent a year ago, according to researcher Autodata Corp. Ford lost sales to Japanese rivals including Toyota Motor Corp. and Honda Motor Co., which increased their share of the U.S. market.

"Our guess is our share will be relatively flat next year," James O'Connor, a group vice president, told reporters. Sales of pickup trucks and sport-utility vehicles will help, he said. "We'll sell our trucks."

Ford, the world's second-largest automaker, had a net loss of $5.45 billion last year and in January announced a plan to cut jobs, close plants and introduce new models to generate $7 billion in annual pretax profits by 2005.

O'Connor said Ford "is trying to stay relatively competitive" on incentives "but we're not doing it any cost."

Larger rival General Motors Corp. is lengthening interest-free loans on most 2003 sport-utility vehicles and will provide cash incentives on some models after U.S. sales fell in the last two months.

In response, Ford lengthened interest-free loans only on its Explorer sport-utility and increased cash rebates on four truck models.

Stacy94PGT · 12-19-2002, 09:55

Ford sees incentives boosting December U.S. car sales
Reuters / December 19, 2002

DETROIT -- U.S. sales of new cars and trucks are likely to come in at a stronger-than-expected total in December, thanks largely to blowout spending on incentives by General Motors, a senior Ford Motor Co. official said Wednesday.

"I think the industry will surprise some of the early expectations by quite a bit," said James O'Connor, Ford's head of marketing and sales for North America.

"I think General Motors has hyped it with about three or four different levels of incentives," O'Connor said of the monthly sales rate.

"It's a good time for consumers to buy," he added, saying incremental spending on incentives by GM was driving the sales rate higher after a sharp slowdown in October and November.

GM has fired first in Detroit's price war for most of the last year, offering interest-free or low-interest loans and other deep discounts to help bolster sales amid the wobbly U.S. economic recovery.

Ford and the Chrysler group have matched GM's pricing moves, for the most part. But O'Connor, who noted that GM is bent on achieving a second consecutive year of market share improvement this year for the first time since 1976, told reporters that Ford was no longer prepared to follow its larger rival step-by-step.

"They're passionate about getting that done at any cost," said O'Connor, referring to GM's market share goal and his own estimate that GM had increased its incentives spending by "hundreds of millions of dollars" in December over November.

"We're trying to remain relatively competitive, but our incentives are substantially less," he said.

As an example of GM's discounting, O'Connor said the company had a total of about $5,000 to offer in discounts to buyers of the compact Chevrolet Cavalier. That compares with a total of just $1,500 in incentives on Ford's compact Focus, O'Connor said.

A GM spokeswoman disputed those figures and Paul Ballew, GM's chief of industry analysis and sales, said all automakers had been aggressively discounting this year to bolster sales.

"We've said all along that we're playing this game to win," Ballew told Reuters. "We're playing this game to win over a longer period of time. We're not just trying to win in the month of December," he said.

"To assume that we're just throwing hundreds of millions of dollars into the market needlessly, it's incorrect."

O'Connor and Ballew both cautioned that it was too early to give a firm read on December sales, since a large amount of deals in the month are done between Christmas and New Year's Day.

But Ballew noted that many estimates are still cautious after the industry's recent slowdown.

"I wouldn't describe it to be a great month, but it will be a solid month," Ballew said.

O'Connor said Ford expected the U.S. market share of its Ford, Lincoln and Mercury brands to hold "relatively stable" next year. GM's domestic brands had 28.1 percent of the U.S. market through November, while Ford held 20.3 percent.