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Old 03-31-2005, 06:35   #1 (permalink)
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US:Ford looks for F-series rebound

Ford looks for F-series rebound

AMY WILSON | Automotive News

Sales of the Ford F series stumbled during the first two months of 2005, squeezing dealership profits and triggering higher rebates in March.

After a record-setting 2004, Ford Motor Co. executives anticipated a falloff early this year. But the extent of the January-February drop surprised them, says Ford North America sales chief Earl Hesterberg.

Sales of the F series fell to a combined 108,881 units in January and February, a 15.6 percent slide from year-ago sales.

"We backed off a little bit in January, and that payback was bigger than we expected," says Hesterberg, group vice president of marketing, sales and service. "We had expected a bigger bounce-back in February than we got. We had become a little too uncompetitive on the incentive side."

The F series lost nearly a point of share in the full-sized pickup market during January and February, he says. To stem the falloff, Ford opened the purse strings in late February, increasing cash rebates on its pickups by as much as $1,000.

As a result, March sales are poised to come in at around 80,000 units, on par with a year ago, Hesterberg says.

Arguably the most important product in Ford's stable, the F series has contributed half of the company's profits in past years, one analyst has estimated. Its high margins also drive dealership profitability. Hesterberg attributed a 15 percent decline in Ford Division dealership profits in January directly to the falloff in truck sales.

Goal: 900,000

Ford is aiming for F-series sales of 900,000 in 2005. That would represent a 4.2 percent slide from 2004, when Ford - buoyed by a redesigned F-150 and updated Super Duty pickups - sold a record 939,511 of the F series.

This year's 900,000 goal "is important to our business, and that is required for us to increase our market share," Hesterberg says.

After several years of slipping sales, Ford is trying to regain share, particularly on the retail side of the business. Its domestic brands ended 2004 with 18.3 percent of the U.S. market, down from 19.5 percent in 2003.

Ford is reaching for the share rebound even as it acknowledges declining sales of large trucks. The automaker is counting on better sales of smaller sport wagons and new cars for the turnaround.

Ford's F-series incentive spending was just 60 percent to 70 percent of the spending by Chevrolet and Dodge in January and February, according to Autodata Corp. information provided by Ford. Incentives on the Super Duty versions were even less, around 35 percent of the competition's, Hesterberg says.

The F series carried an average of $2,883 per unit in incentives for the year-end December push, according to Autodata, a research firm in Woodcliff Lake, N.J. The F-series figure dropped to $2,438 in January before rising to $2,908 in February.


Ford raised incentives on the Super Duty pickup in March to push F-series sales.

Spending on Super Duty

Much of the spending Ford added in March was for the Super Duty, Hesterberg says. Sales of the Super Duty are tracking at 95 percent of Ford's March target rate, while F-150s are selling better than the target.

Dealerships are seeing the March rebound. At Prestige Ford in Garland, Texas, dealer Jerry Reynolds expects this month to be about even with his 215 F-series sales in December, when "we all threw everything we had at it."

Prestige's F-series sales in January and February fell off about 15 percent from December. Most of the slump was primarily because of fewer F-150 sales.

"It hurts when you're not selling pickups down here," says Reynolds. "It's going to affect your bottom line. There's no way around it."
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