If It Isn't Broke

Ford Chairman Alex Trotman feels perplexed--albeit upbeat--about the public's mixed reaction to Ford's new Taurus, which went on sale last September. During an interview in mid-February he drew a recent newspaper story from his pocket describing sales as "dreary."

"Our sales force put in a tremendous performance in January," he said, somewhat annoyed.

Indeed, Taurus sales in January were 30,052, as compared with the previous January's 29,958

"Feedback from our dealers is good. Customers like the product. People who get in and drive it are a sell. And the initial satisfaction of owners is high."

But in December, Taurus sales dipped to 26,400 from 42,198 in December 1994. The comparison wasn't particularly relevant, in Ford's view, because heavy discounting on two-year leases in 1992 meant that the number of people turning in cars for new Tauruses in December 1994 was unusually high.

Still, the 37% sales decline sparked widespread media speculation that the new Taurus was floundering because it was smaller than its predecessor, too expensive and too radically styled. Ironically, in 1991, Ford offered a restyled version of the original Taurus that some critics panned, saying it was too similar to the original.

The most popular version of the new Taurus costs $19,390, up 2.5% from the old model.

"There's some frenzy going on" in the press, Trotman said. "People think it's smaller, but it's not," except for the trunk. "We put a split-seat fold-down feature that is standard equipment. So your golf clubs will fit, and so will a piece of molding" that a homeowner might need to remodel a home.

Ford might have offered introductory discounts to boost sales but was reluctant to do so on a brand-new model. "We were up against heavy discounting. In retrospect, we may have stayed out of discounts too long. In recent weeks, Ford has slapped a $600 cash rebate on Taurus and said it will offer a version with a fewer features that sells for another $600 less.

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