Ford Sees Its Share Dropping in 2006
Ford Motor Co.’s top U.S. sales analyst said Wednesday that the automaker’s U.S. market share would probably continue to decline this year despite its turnaround efforts.
George Pipas said Ford’s U.S. market share has dropped by one percentage point -- or about 150,000 vehicles -- each year for the last five years. Arresting that decline and then stabilizing market share are top priorities in Ford’s North American restructuring plan, but Pipas said the losses would probably continue in the near term.
“It’s very difficult to get that thing flat-lined in a year,” Pipas told analysts during a conference sponsored by Prudential Financial. “Our goal this year is to reduce the rate of decline. Once the rate of decline is starting to narrow on a year-to-year basis, then we can think about stabilizing.”
Pipas wouldn’t say what he thinks Ford’s ideal market share will be amid increased competition in the U.S. Ford, the second-largest U.S. automaker, held a 17.4% share in 2005.
He said a suitable market share would be one that lined up with Ford’s production capacity. Ford is cutting that capacity as part of the restructuring, and plans to close 14 facilities and cut 30,000 jobs by 2012.
Pipas said he expected Ford to be a solid performer this year in the growing crossover segment. He also expected Ford customers to remain loyal to the company’s full-size pickups despite Toyota Motor Corp.’s newly redesigned Tundra, which will go on sale early next year.
“The pickup market has different characteristics than the passenger car market,” Pipas said. “There’s not this perceived shortfall in quality and a reason to switch.”
Separately, Ford said it planned to build gasoline-electric versions of the new Ford Edge and Lincoln MKX wagons by 2010 to help increase its hybrid sales to 250,000 a year.
The gasoline-electric Edge and MKX will be produced in Oakville, Ontario, and will be the first hybrids made in Canada.
Ford, the first U.S.-based automaker to sell fuel-saving hybrids, is trying to catch up to Toyota and Honda Motor Co., which in 1999 started offering such vehicles in the U.S. Record gas prices helped boost hybrid sales last year to 211,875, according to J.D. Power & Associates. Toyota’s Prius car accounted for more than half of those.
The Edge and Lincoln MKX wagons, so-called crossover vehicles that combine truck and car elements, were introduced last month at the Detroit auto show and will begin sales late this year for the gasoline-only versions.
Ford sold about 21,000 hybrids last year in the U.S. The automaker in 2004 began selling a gasoline-electric version of its Escape, the first hybrid sport-utility vehicle. Ford also sells a gasoline-electric version of the Mercury Mariner SUV.
Ford shares rose 8 cents to $8.38.
