Tire Recall Deflates Ford Explorer Sales
Ford Motor Co. acknowledged for the first time Wednesday that the furor over Firestone tires had driven down sales of the Ford Explorer sport-utility vehicle, with October sales down 16% from a year ago.
Not only were sales of new Explorers down, but Ford said it had moved to shore up sales of used Explorers, whose prices have dropped sharply since the recall was announced.
Ford sold 29,611 Explorers in October, down nearly 6,000 vehicles from last October’s total of 35,436.
The decline is “purely the recall,” said Art Spinella, an industry analyst with CNW Marketing/Research in Bandon, Ore. “The real problem is that people still associate Firestones and Ford. Ford has not yet separated itself from the issue.”
But George Pipas, a sales analyst for Ford, said several other factors hurt Explorer sales, including a cut in production to divert tires to the recall, the launch of the Ford Escape SUV and buyers deciding to wait for the 2002 model of the Explorer.
But he also cited the furor over 119 deaths linked to vehicles with Firestone tires--most of them Explorers. “Common sense tells you there is some fallout from the Firestone tire recall,” Pipas said. “It wasn’t a blow to the midsection for this brand. If it was, I certainly would have expected to see quite a substantial reduction in August and September sales.”
Since the recall was announced Aug. 9, Ford has said sales of new Explorers were not affected by the recall. But new-vehicle buyers usually take about two months to make up their mind, and industry analysts had found that the recall had moved the Explorer down the shopping list of many buyers.
Spinella said his research has found that prices paid for used Explorers had fallen about 8.5% in the last six months, while prices for all used compact SUVs had fallen 3.5%.
Ford has begun offering 5.9% or 7.9% four- or five-year loans on 1997 to 2001 Explorers. Ford spokeswoman Carolyn Brown said the company occasionally offers such incentives on various models, but declined to give specific reasons for the Explorer program.
The effects of the decision to cut Explorer and Mercury Mountaineer production by 15,000 vehicles had led to low supplies in some parts of the country, Pipas said.
He added that Explorer sales would likely slow more in November and December as the company slows production to ramp up for the 2002 model going on sale early next year. Ford has already stopped building four-door Explorers and Mountaineers at its Louisville, Ky., plant, leaving the Hazelwood, Mo., factory as the sole source of those vehicles for now.
Ford’s overall sales were down 6% in October, with an 11% decline in cars and a 3% decline in trucks.
Most major auto makers said their U.S. sales fell last month, in part on shortages of some models such as Honda Motor Co.'s Civic. General Motors Corp., however, drew buyers with discounts that pushed its sales up 7% in October.
Sales at DaimlerChrysler’s Chrysler arm fell 8.4%. Honda’s 5.6% sales decline was its first since August 1998, while Toyota Motor Corp.'s sales fell 5.7%.
Industrywide sales fell 0.9% to 1.35 million units for the month, Autodata Corp. said, compared with a forecast of a 3.6% rise.