Chevy, Ford in final face-off?
Ford and Chevrolet are again battling for bragging rights as the No. 1 brand in U.S. auto sales -- probably for the last time -- as they prepare this week to announce their final 2006 tallies.
Sales at Toyota, third among auto brands, continue to rise, while Ford’s slow. By the end of this year the namesake brand of Toyota Motor Corp. will probably be accelerating to close the gap with, and possibly pass, General Motors Corp.’s Chevrolet as America’s No. 1 nameplate.
Such a scenario was hard to imagine 10 years ago, when the Ford division outsold Chevrolet by 720,000 vehicles and Toyota finished fourth, 2.18 million vehicles behind Ford. The Dodge brand of what was then Chrysler Corp. place third.
Now, with ailing Ford Motor Co. plotting a course to shrink its market share in a bid to become profitable, its namesake division shrugs off the likelihood that it will fall to third next year with a “so what,” publicly at least.
“We are focused on getting our business profitable. We can’t be distracted by sales races and sales rankings,” said George Pipas, Ford’s top sales analyst. “That stuff is not even on our radar screen.”
Chevrolet, GM’s biggest unit, edged the Ford brand by 17,000 passenger cars and light trucks in 2005 to take the crown for the first time since 1986. But despite its woes in 2006, Ford held a 22,000-vehicle lead going into December. Chalk that up to any of a number of factors, notably that Ford sold more cars than Chevy, thanks to the Fusion mid-size sedan.
Pipas said he was unaware of a year-end sales push by Ford to regain the crown, other than rebates and interest-rate incentives announced in November.
“The subject didn’t even come up before the holidays,” he said. “We have much more important things to be concerned about to get this business turned around.”
Not so at Chevy. General Manager Ed Peper urged dealers in a video message in early December to “demonstrate the heart of a champion, just as you did last year,” and beat Ford.
“We’re proud of that accomplishment and want to repeat it this year,” Chevrolet spokesman Terry Rhadigan said. “We know we’re not curing cancer here, so we keep it in the right perspective, but it’s important to us and to our dealers.”
Wheeling, Ill., Chevrolet dealer Bill Stasek said it mattered in telling customers that Chevy’s vehicles are worth considering.
“Absolutely. Ten years ago I probably wouldn’t have said that, but General Motors has gotten beaten up so badly since then that we need all the good stuff we can get,” he said.
Chevrolet outsold Ford by 23,000 vehicles in November, so a strong December could put Chevy on top. Automakers will report sales results Wednesday.
Pipas said one act demonstrated how little the sales crown mattered: Ford closed the Atlanta plant that built the Taurus in October. Continuing production through year-end would have virtually assured Ford the sales lead.
“That puts our feelings on that subject in the right perspective. If the calendar-year sales race with Chevrolet was important, we could have built another 40,000 Taurus units,” he said.
Charlie Hughes, former head of North American operations for Land Rover, which Ford owns, and Mazda, which Ford controls, calls the automaker’s attitude “loser speak.” Instead, Ford should use the sales race as an opportunity to generate good news, said Hughes, head of consultant Brand Rules of Severna Park, Md.
“It should be tremendously important to them,” Hughes said of Ford and its executives. “There’s enough bad news going around Detroit to sink a navy. When times are tough, that’s when you need to search for positives, pull out all the stops.”
Quantifying the benefits of being the leader is difficult, but Hughes believes that it sways shoppers: “Customers sense who is rising and falling, who has the momentum.”
But what is it worth for Chevrolet to catch Ford? Apparently not outspending its rival on incentives.
Chevy is participating in General Motors’ year-end sales promotion, the Red Tag Event, and the most generous offers on 2007 models are on Silverado pickups, which have a $2,500 rebate on extended-cab versions. Large sport utility vehicles such as the Suburban, Tahoe and TrailBlazer carry $2,000 rebates. But several other models offer rebates of as little as $500, and the Malibu, Monte Carlo and Colorado have none.
All 2007 Ford models carry a $1,000 year-end bonus in addition to rebates of as much as $3,000 on the Freestar minivan and F-Series pickups. Incentives expire today.
GM, for several years the biggest spender on incentives, lowered prices on most models last January and cut rebates and other offers in 2006. It spends less per vehicle than Ford or Chrysler Group, the U.S. unit of DaimlerChrysler of Germany.
“The incentive game, as far as Chevrolet is concerned, is a thing of the past,” dealer Stasek said, so he is back to selling the virtues of the vehicles instead of prices. “The ball’s back in our court, and we have to prove what we say is true.
“The battle between Chevrolet and Ford is certainly one we’re interested in, but we’re banging heads with a lot more than Ford.”
There’s Toyota again, along with Honda Motor Co.
When CNW Marketing Research surveyed customers who bought Chevrolets this year, it found that more considered Toyotas and other GM models than Fords. Among Ford buyers, Toyota also was the top competing brand considered, with Chevy second.
Stasek said that unlike 30 years ago, when dealers could count on customers coming back, auto shoppers these days routinely consider alternatives.
“There certainly is not the blind loyalty there used to be,” he said. “You used to be able to just put a Chevrolet sign out, and people would come. Today you have so many quality products competing for the attention of consumers.”
Stasek said GM’s improving quality rankings and the five-year, 100,000-mile powertrain warranty on 2007 models were turning heads: “We’re taking more import trades than we’ve ever seen.”
