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: AutoNews: Ford Struggles Amid Weak January Results

02-02-2008, 01:33 PM
Ford struggles amid weak January results

But affiliate Mazda has strong month

Rick Kranz

Automotive News | February 1, 2008 - 4:26 pm EST

DETROIT -- Total Ford Motor Co. vehicle sales slipped 4 percent in January to 159,914 units. Totals include the Premier Automotive Group.

Ford, Mercury and Lincoln accounted for 148,355 units of those sales, also a decrease of 4 percent.

But Ford could take solace in the results from its Japanese affiliate, Mazda Motor Corp., which enjoyed its best January since 1994. Mazda sold 21,212 vehicles in the United States last month, up 10.2 percent from the same month of 2007.

The freshened Mazda5 minivan led the way with a 28.4 percent gain, and the Mazda6 sedan was next with a 27.0 percent boost.

"After closing 2007 as the fastest-growing major car company in the U.S., we kicked off 2008 signaling our intention for another strong year," Jim O'Sullivan, CEO of Mazda North American Operations, said in a statement.

Ford’s sales decrease reflects a continuing reduction in fleet car sales that started last year, said Ford sales analyst George Pipas, who spoke with analysts and journalists during a teleconference today.

Pipas said the automaker will continue to reduce fleet sales until the end of the 2008 model year. He did not reveal what percentage of sales or production the automaker was targeting for its fleet business.

Pipas said that although car sales were down 11 percent in January, that “was due to a sharp reduction in fleet (car) deliveries compared with a year ago. Retail sales for cars were down 3 percent.”

He said that while Ford Fusion sales were down 12.8 percent last month, “retail sales slipped slightly.”

Pipas said Ford’s total retail vehicle sales for January were down 9 percent compared with a year ago, while fleet sales were up 9 percent. “Importantly, the daily rental business was down 5 percent” compared with a year ago, Pipas said.

He said that in January 2007, Ford’s daily rental sales were down 65 percent.

On a combined basis, the Ford Fusion, Mercury Milan and Lincoln MKZ had retail sales that were slightly higher than last year, Pipas said. He said the restyled replacements for those models will be introduced later this year, and sales for the trio are expected to increase.

One of Ford’s big sales highlights last month was the restyled, re-engineered Ford Focus, up 44 percent for that month. Retail sales accounted for a 33 percent increase.

Meanwhile, total sales for the Ford Edge and Lincoln MKX crossover increased 95 percent and 78 percent, respectively. Production for both of those new crossovers was ramping up last January.

Although spending for incentives rose in some regions, overall, “we were one of only two manufacturers that was down year over year in January,” said Jim Farley, Ford’s group vice president of marketing and communications. “Our plan is to continue with our strategy of disciplined production and profitably growing our business.

“We our deploying incentives differently than we did in 2007. There will be certain regions, certain vehicles in certain months where we will accelerate based on market opportunities.” Farley pointed to a successful Ranger marketing program that boosted sales of the pickup 19.2 percent last month.

Total car sales for the Ford brand slipped 1.9 percent in January; Ford truck sales were off 0.2 percent. For the month, the Ford brand was of off 0.7 percent. The Mercury brand dropped 26.2 percent, while Lincoln fell 16.8 percent.

At the Premier Automotive Group, Jaguar’s sales were off 52.2 percent, Land Rover was down 16.7 percent, and Volvo was up 2.9 percent.