JAPAN: Ford sees no let-up in US incentives
Ford chief operating officer Nick Scheele said on Wednesday he sees no let-up in costly sales incentives in the US market, even as the economy there shows signs of strength, Reuters reported.
"I don't see a reduction in the revenue wars taking place," Scheele told Reuters at the Tokyo Motor Show, adding: "We certainly don't forecast for it."
The news agency noted that car makers, particularly the US companies, have continually raised incentives such as cash rebates over the past two years to boost sales and revenues as they battle for market share to cover high fixed costs at their plants.
Scheele reportedly said Ford will fight for market share even as the economy strengthens. "We're not aiming to give up market share in a market that is continuing to show a lot of signs of strength," he told Reuters.
The news agency said Ford holds about 20% of the US market, excluding brands imported from its overseas plants, while the top share of about 28% is held by General Motors.
Scheele told Reuters that, despite the costs of incentives, Ford will look in other aress of the business to cut costs to achieve its stated goal of breaking even this year in its automotive business.
"We are going to make automotive breakeven, we are going to reach our goals, and we will take it out of costs. We'll just keep on doing that," he reportedly said.
Reuters noted that Ford last week posted a less-than-expected loss for the July-September quarter, after strong gains from its finance arm Ford Credit partially offset steep losses in its automotive unit - the third quarter is traditionally the weakest for the automotive business.
The news agency said one area where Ford hopes to cut costs is through sourcing of lower-cost parts from China. Scheele told Reuters Ford aims to source $US1 billion of parts and components from China on an annual basis in the future, a fraction of the annual $90 billion it spends around the world each year
"We put a task force into China to look for a billion (dollars worth) of exports. We have found close to that," he told Reuters.