RPO83

BY MARK PHELAN AND JEFFREY MCCRACKEN
DETROIT FREE PRESS BUSINESS WRITERS

Less than 18 months after it went on sale to wide acclaim, the Ford Thunderbird faces swelling inventories and the prospect of discounting below sticker price.

The luxury roadster finds itself struggling to reach its sales target.

"We are a little concerned about it. It's not doing great," said Michael Kennedy, chairman of Ford's dealer council and owner of four Philadelphia-area Ford dealerships.

Despite that, Ford Motor Co. says the Thunderbird isn't crashing to earth.

"Our inventory of Thunderbirds is fewer than two cars per dealer," Ford spokesman Jim Cain said Wednesday. "Some dealers may be carrying higher stock levels than usual to prepare for spring," he added, noting that nearly 40 percent of convertibles are sold from June through September.

Ford had a 133-day supply of Thunderbirds at the end of December, compared with a 26-day supply a year earlier. It hit the market in August 2001. "Days' supply for a specialty car is a very inappropriate measure," said George Pipas, Ford sales and analysis manager.

"I've only got about 6,600 Birds in stock . . . I'm completely comfortable with that."

The Thunderbird was Motor Trend magazine's car of the year, but Ford sold just 19,085 in 2002, well short of the goal of 25,000 to 30,000 a year announced when the retro convertible first went on sale.

The Thunderbird commanded $8,000 to $10,000 above its sticker price when sales began, but will probably sell for $1,000 to $2,000 under Ford's recommended price by spring, said Jesse Toprak, senior manager of pricing and market analysis for Edmunds.com, which tracks the prices people pay for vehicles, as opposed to the manufacturer's suggested retail price, or MSRP.

"We think there are going to be some discounts soon," Toprak said. "It may stabilize around $1,500 under MSRP."

The MSRP for the base 2003 Thunderbird is $37,175, including a $605 destination charge.

Convertible sales are notoriously seasonal, cooling in winter and heating up as the weather improves. However, the Thunderbird's weakening price is unusual, Toprak said.

"Corvettes and BMW convertibles sell at MSRP for years," he said. "This is only the Thunderbird's second year on the market, and you're already seeing softening in price. Next year, I think you're going to see problems.

"Once you have price softness, the only thing you can do is put incentives on the car or enhance the product."

The T-Bird was hampered by cooling-system problems that delayed the start of sales in 2001. Unspecified problems reduced production last spring, a shortage that led to anemic June sales of just 1,290 cars.

"It's not a hit," said Jeff Brodoski, senior auto analyst at automotive research firm J.D. Power & Associates. "They've kept expectations low, at 25,000 a year, but they've only had two months where they even hit 2,000 in sales. It's struggling now, and it still hasn't hit its second year."

Senior auto analyst Mike Wall of the auto-research firm IRN Inc. said it is "too soon to call the Thunderbird a complete failure, but it's safe to say it's not the halo vehicle Ford had hoped it would be. I don't see a big line of buyers waiting to get the T-Bird like the" Hummer H2 or Dodge Viper used to have.

It's very difficult for an automaker to predict demand for a pricey specialty car like the Thunderbird, said Michael Robinet, vice president of global forecasting for CSM Worldwide, which advises suppliers on the sales prospects for cars and trucks.

"There's no doubt Ford would like customer enthusiasm to be higher than it is," Robinet said. "I don't think Ford's going to throw in the towel, though. The Thunderbird is an important halo car, but it's not likely to be in Ford's lineup 10 years from now."

Ford will probably use specialty models to spice up Thunderbird sales. It is already selling a coral-pink T-Bird like the one Halle Berry drove in the most recent James Bond movie, and a more powerful model like the supercharged Thunderbird concept car displayed at the recent Los Angeles auto show is also likely.

__________________
*Retired.

Paul Vincent

Horsepower...about 400 of it will cure this sales slump. Believe me.