NEW YORK –Div. is vowing to reverse a 7-year slide that has seen its light vehicle market share fall from 21.6% in 1995 to just 17.5% in 2002.
“We need more work on the share side," admitsDiv. President Steve Lyons at a press conference here. "I have my eyes set on an 18% market share this year. I think we're going to make that."
|Replacement for Windstar (above) expected to boost Ford minivan sales.|
Despite the drop last year – Ford’s penetration fell 1.5 points in 2002 alone, Ford Div. was "very profitable," Lyons says.
This year’s forecast half-point growth will come from a combination of factors. "The Expedition is good for a couple of tenths," he says. Heavy-duty trucks will contribute an additional 30,000 units, he adds, and an increase in Escape availability, thanks to added production in Avon Lake, OH, also will help.
Lyons feels that Ford's older car models can retain their present shares and even add some volume as a result of pumped-up marketing programs. A new 100,000-mile (162,000 km) extended warranty on Focus is Ford's answer to the Korean brands that are fierce competitors in the small car segment. It's part of a revitalization strategy for that model that earned a negative reputation for poor quality when it was introduced in 2000.
Lyons also says Taurus, sometimes referred to as the biggest secret in the lineup, will maintain volume. It will be helped along by its first national ad campaign since the ’00 model year. Taurus also will have generous incentives of $3,000 cash back or 0% financing for up to 60 months. Lyons says the car is profitable, with fleet and retail sales split 50/50. (see related story: Taurus to Get Marketplace Help From Unlikely Source)
A replacement for the Windstar, on tap later this year, will help rack up more minivan volume, he predicts.
In addition, Lyons says he does not see signs of an SUV backlash damaging Ford’s truck momentum. "The chatter about SUVs has been blown out of proportion compared to what people around the country say about these vehicles.
“I would be unhappy to sell less than 400,000 Explorers – and that could go to 425,000,” he adds. That's slightly less than the 435,000 Explorers that were sold last year, but that’s because Lyons is forecasting lower industry sales overall.
He expects big growth from F-Series Super Duty pickups this year. The new 6L Power Stroke diesel should help expand this sub-segment by 30,000 units, he says, forecasting sales of 225,000-250,000 diesel-powered Super Duty pickups without any incentives.
Lyons also is planning on sales of 12,000-15,000 Blue Diamond medium-duty pickups with that diesel. United Parcel Service and other companies use those trucks as delivery vans.
Ford's all-new F-Series, which debuts later this year, will contribute a growth in market share, but not necessarily in volume. Ford sold nearly 900,000 F-Series pickups last year. Lyons is predicting an overall lower volume this year and says two-thirds of those F-Series sales will be the older-generation ’03s.
Production of the current model is being stepped up to increase inventory prior to a shutdown necessary for transitioning to the new truck. Job 1 for the ’04 F-Series is June 16 at the Norfolk, VA, plant. About a month later, the Kansas City, MO, plant will begin assembling the new pickups and next year the Rouge facility in Dearborn will add to the volume.
Lyons admits Ford Div. planned too conservatively in 2002, even though it sold almost 3 million vehicles. This year, Ford Motor Co. is planning on a 16.5 million car and truck market. If demand soars to 17 million, Lyons says Ford's flexible production plan would allow it to keep pace.
The Ford sales executive says the company has factored in a sales disruption in the first half of this year because of the potential for a war in Iraq. However, he feels Ford Div. still can make its 18% target.
Lyons is not concerned about competition from Japanese pickups. He notes thatTundra buyers have come mostly from the smaller Toyota Tacoma. The new Titan also will draw customers from within its own brand, he predicts.
"is not coming out of my hide," he says.
The challenge by the Japanese in the pickup market is not at all like the situation that allowed them to carve out a big share of car sales, he adds.
"Here we are dealing with strength and getting stronger," Lyons says. "We will defend (our share) at all costs."
He notes that Ford andCorp. have huge advantages in the number of sales outlets. "We have 3,900 outlets," he says.
However, Lyons is realistic about needing incentives, even for the new F-Series. The current model offers a rebate, though he claims Ford’s incentives run about $500 less per unit than GM’s. This helps offset GM's admittedly lower manufacturing costs.
Lyons also implies that even lower incentives will be needed on the ’04 F-Series, helping the division compensate for the new truck’s higher manufacturing cost than the outgoing model.
Lyons insists that Ford's margins on its vehicles haven't changed in a decade.