Tuesday, June 2, 2009

In other news.....

GM divebombing and Ford climbs.

I am curious as to why it shows 184,000 cars last year and this year only 150,000 units. Were gas prices that much last year to boost car sales over truck? I guess we owe four dollar gas and a new 2008 Focus sales to the higher numbers. Not sure if the Edge crossover counts as a truck.

Maybe the 2010 Fusion, Mustang and Taurus will all be grand slams and Ford will continue to do well!

Wall Street Journal
DETROIT -- Ford Motor Co. is preparing an effort to gain market share while its two main rivals are bogged down in bankruptcy and restructuring.

Ford, the only one of Detroit's Big Three that didn't need a bailout from the federal government, plans to increase production of cars and trucks in the third quarter by about 10% from the level of a year ago, a company official said. It will be Ford's first significant production increase in almost two years.

In contrast, General Motors Corp., which is expected to file for Chapter 11 protection Monday, and Chrysler LLC, which is nearing the end of its bankruptcy reorganization, are planning to shut down their plants for nearly all of the third quarter. The difference in production plans will give Ford a chance to push sales through the prime summer selling months while GM and Chrysler focus on their internal issues.

"This is a once-in-a-lifetime opportunity to separate us from our other domestic competitors," said a person familiar with the matter at Ford. "No one is going to gift-wrap it for us. You have to deliver the product people want to buy. That said, you have to take this historic opportunity to grab market share."

Ford has seen a gain in retail market share in six of the past seven months and expects to see another boost when May auto sales are reported Tuesday. As of April 30, Ford's U.S. market share was 13%, according to the company.

In the third quarter, Ford plans to produce 150,000 cars and 310,000 trucks for a total of 460,000 vehicles, according to company officials. A year ago it built 184,000 cars and 234,000 trucks for a total of 418,000. The bulk of the increase stems from high production of the company's highly profitable F-150 pickup trucks.

The move represents a gamble, however. Gas prices have been creeping higher in recent weeks, topping $3 a gallon in some parts of the country. Further gas-price increases could damp F-150 sales, and a worsening of the overall economy could slow sales of both cars and trucks. If either happens, Ford could end up with elevated inventory levels later in the year.

The truck market "is still going to be a challenge," said Michael Maroone, president and chief operating officer of AutoNation Inc., the largest chain of car dealerships in the U.S. and the largest Ford dealer by volume and locations.

Ford executives played down the notion the company is trying to take advantage of the troubles of GM and Chrysler. "I feel for my competitors. It's got to be very, very difficult," Mark Fields, Ford's president of the Americas, said Sunday. "This is not a case of 'Gee, let's stick it to them.' We have been watching our inventory levels and we've seen our market share grow. This is really just us working our plan."

Like most other auto makers, Ford is still losing money -- it lost $1.4 billion in the first quarter -- but it has been faring better than GM and Chrysler, in part because it borrowed $23.5 billion in 2006, before credit markets started to freeze up, and was quicker to sell some of its fringe brands. As a result, Ford had a larger cash cushion. Recently it also raised $1.6 billion in a common-stock offering.

Ramping up production can be seen as evidence of Ford's cautious but growing confidence in the state of the U.S. auto market, which saw one of the most severe downturns in its history last year and may now be poised for a rebound.

"We're starting to see the light nearing at the end of the tunnel," Mr. Fields said.

Ford's production increase also raises the prospect that the Dearborn, Mich., auto maker could surpass GM in North American production this year, something that hasn't happened in decades, according to IHS Global Insight, a forecasting firm.

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