Ford Felt the Pain in 2007

Much went wrong for Ford Motor Co. in 2007.

The company recorded its worst sales in a quarter century, ceded its No.2 auto company status in the U.S. to Toyota Motor Sales U.S.A. Inc. and saw the Blue Oval fall from the No.1 to No.3 brand behind rivals Chevrolet and Toyota.

But the bulk of Ford's 2007 problems fell squarely in the bed of its top-selling F-Series, which under performed in the fullsize pickup segment and accounted for a big slice of the auto maker's overall volume gap with Toyota.

While the year's dramatic housing and construction downturn and high fuel prices were to blame for much of the industry-wide fullsize pickup sales decline of 3.4%, the F-Series demand plunged a precipitous 14.9%.

In contrast, sales of General Motors Corp.'s Chevrolet Silverado slumped just 2.8% and Chrysler LLC's Dodge Ram dipped only 1.8%, as the two models staved off much of the impact from the aggressively marketed all-new Toyota Tundra, up a whopping 57.9% for the year.

Looked at company-wide, Ford's performance appeared even worse, as 2007 sales of its F-Series (which is being replaced by an all-new '09 model that debuted last month) and Lincoln Mark LT large pickup fell a combined 15.2%. That compared with a 2.3% decline in combined Chevrolet/GMC fullsize pickup sales.

In fact, year-over-year volume change in the segment for Ford (down 115,000) and Toyota (up 72,000) was higher than the total 118,000 units by which Toyota outpaced Ford for the No.2 spot in overall light-vehicle sales.

U.S. car and light-truck sales finished the year at 16,089,312 units, down 2.5% from 2006. December sales of 1.38 million units equated to a seasonally adjusted annual rate of 16.2 million units, surpassing the 16.09 million tally of the first 11 months. The performance ensured 2007 would top the 16-million mark for the ninth straight year but still left it as the second-worst year in the past decade.

Although the downturn in annual sales and the ongoing crises in the housing and lending markets have many prognosticators predicting a sub-16 million new-vehicle market in 2008, it is worth noting '08 model year continued to track at a 16.1 million SAAR in its first quarter (October-December).

While Toyota's efforts to market its largest-ever Tundra were unfazed by soaring fuel costs, the Japanese auto maker also was able to capitalize directly on heightened consumer sensitivity to gasoline prices, as the Toyota Prius became the first vehicle offered solely with a hybrid powertrain to place among the top-10 selling cars in the U.S.

In a down year for sales, Toyota increased not only market share but unit sales as well, posting record volume for the 12th straight year. Toyota's Camry remained the No.1 car in the U.S.

As Toyota settled into its No.2 spot overall, it also made a bid for its Toyota brand to be recognized as the nation's No.1 seller, though Chevrolet ultimately edged it out for the title by about 100,000 units. However, by including Scion-brand vehicles sold in Toyota dealerships, Toyota dealers can lay claim to having outsold Chevrolet dealers by about 40,000 units.

Scion may have given Toyota dealers at least plausible partial bragging rights, but the brand, itself, was one of the few dark spots for Toyota, dropping nearly 43,000 unit sales, or 24.8%, from 2006.

Despite the competitive threat from Toyota, GM remained the top light-vehicle seller in the U.S. by a wide margin, delivering 3.82 million cars and light trucks, easily outdistancing Toyota's 2.62 million units. Still, the gap between the two has never been closer. Posting 6% fewer sales in 2007 than in 2006, GM lost 0.8 points of market share, while Toyota gained 0.9 points. GM's resulting 23.8% share of light-vehicle sales is just 7.5 points higher than Toyota's record 16.3% share.

Despite Chrysler's tumultuous year as a result of its separation from Daimler AG, the auto maker managed to keep sales closer to year-earlier levels than either of its U.S.-based competitors, dropping just 0.1 points of share for 12.9%, on a volume of 2.07 million units — down 3.1% from 2006.

American Honda Motor Co. Inc. increased sales some 42,000 units in the down market, and its Accord overtook Toyota's Corolla/Matrix as the country's second-best selling car. But the auto maker's 2.8% rise was its smallest annual gain since 1995 and marks the only time since then that Honda has failed to achieve at least a 3% increase in yearly sales.

John Sousanis is Ward's director of information content.