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US:Ford's share prognosis raises concerns;says domestic brands will lose ground in 05

Ford's share prognosis raises concerns; company says its domestic brands will lose ground in 2005

AMY WILSON | Automotive News

DETROIT - Six months after CEO Bill Ford said U.S. market share would rebound this spring, Ford Motor Co. is throwing in the towel on any share gain in 2005.

Ford Motor executives last week acknowledged that they expect U.S. share for its domestic brands to drop for the 10th straight year. Plunging SUV sales are hurting the company's share more than expected. Ford's domestic-brand share already is at its lowest level since 1928.

Last November, Bill Ford told Automotive News that products such as the 2005 Ford Five Hundred sedan and Freestyle sport wagon and the redesigned Ford Mustang would help boost market share within six months. But though they are helping the company's car share, the Five Hundred and Mustang have failed to turn around the drop in overall share. And that won't change any time soon.

"We now expect full-year market share in the United States to be down compared with a year ago," Ford CFO Don Leclair said during the company's Wednesday, April 20, earnings announcement.

Ford Motor's domestic-brand share continued to slide during the first quarter of 2005, finishing at 18.2 percent. The automaker had a 19.1 percent share in the year-ago period. The Ford and Lincoln brands were down, but Mercury share rose on the strength of new products.

Ford Motor continued to lose retail share in the first quarter, said George Pipas, Ford's top sales analyst. The automaker doesn't break out specific numbers for the retail side, which excludes sales to fleet buyers.

Bill Ford in November said that improving retail share is more important than strengthening total share. But he had expected both to rise.

Lowest since 1928

The Ford, Lincoln and Mercury brands finished 2004 with 18.3 percent of the market. To find a lower annual share figure, you must go back to 1928, when Ford switched production from the Model T to the Model A and ended the year with 15.8 percent of the market.

Ford Motor executives now are looking to the launch of the 2006 Ford Fusion, Mercury Milan and Lincoln Zephyr mid-sized sedans this fall.

"The biggest opportunity for share is going to come when the Fusion and its sister products hit the road," Bill Ford said.

Those vehicles will put the automaker firmly back into a large segment of the market where it hasn't been competitive in recent years, he said.

Ford Motor still sells the Taurus in the mid-sized sedan segment. But that car long ago ceased to be a relevant retail entry and is scheduled to depart next year. More than 80 percent of Taurus sales now are to fleet buyers.

Pipas said he's optimistic that Ford Motor could at least recover car share in 2005.

The automaker's domestic-brand car share rose to 13.2 percent in the first quarter, up from 12.8 percent a year earlier.

Though North America is struggling with share, Bill Ford said the company's market share is increasing in most other regions.

Seasonal shifts

He also said that U.S. share increased sequentially from the third quarter of 2004 to the fourth quarter of 2004 and again to the first quarter of 2005. But such seasonal shifts are common; share performances in all those quarters were lower than in the year-earlier periods.

Meanwhile, Ford already has closed or taken shifts out of several assembly plants to match manufacturing capacity to its lower sales.

Another plant in Lorain, Ohio, will close this year as negotiated in Ford Motor's 2003 UAW contract.

Further cutbacks may be necessary, though Ford won't talk specifics. Says Leclair: "It's safe to say we have more capacity in North America than we need."

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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