Zero Percent Auto Financing Toyota
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Ford’s Comeback Lacks Momentum
General Motors Corp. is heading toward recovery. And Ford Motor Co. is expected to follow after. Though it is apparently exerting efforts, they still lack momentum to save the sputtering automaker.
Ford earlier announced its campaign involving zero-percent financing and $1,000 savings on range of brands. These strategies are aimed at increasing the February sales by 3.4 percent. But February sales turned out to be a frustration. But Mark Fields, the Ford Americas president, is still confident the automaker could still achieve its turnaround goals for the year.
The automaker received more bad marks on its latest internal report card. The report card was shared to ford’s employees following Fields’ weekly Webcast. The report card reflects that the automaker’s February retail sales in the United States were worse than the company projected they would be a month ago.
The recovery plan require for the company to hold onto just over ten percent of the domestic retail market in February. Last month, it said that was improbable but it contended the company could hold the line at ten percent. Nevertheless, Ford only managed to claim a 9.8 percent share in February, missing the target by about 1,900 units.
The automaker blamed the results on weaker than expected sales of the Ford Explorer sport utility vehicle, Ford Mustang sports car and the F-series pickup. But with the new ad campaigns, executives are confident that sales will return to the right track. The ad campaign challenges consumers to compare Ford products to the product line of rival manufacturers.
Ford spokesman Oscar Suris said the numbers presented to employees only show part of the picture. “This is not a comprehensive look at everything affecting the business,” Suris said in an interview. “There are other areas where we are ahead of schedule. Overall, we are where we expected to be at this point.”
According to the report card, 39 percent of those surveyed said they had an “excellent” view of Ford. “That’s better than our domestic competitors,” Suris said, though he said the company still has a ways to go before catching up with Japanese brands like Toyota. “We don’t want to stay there.” The document also showed that financial weakness at many of Ford’s suppliers continues to be a challenge.
During his webcast, Fields said improving brand favorability is a key objective of Ford’s recovery plan. Fields also challenged employees to talk up the company’s new products with everyone they know, saying word-of-mouth marketing can help change the way people look at Ford.
Ford is motivated to make a moving change this year to alleviate its standing. This change could be triggered by powerful campaigns, auto parts upgrade, and efficient work plan. The heat of the auto competition is getting hotter to test not just the performance of Gibson exhaust but the survival instinct of the automakers.
About the Author
Jenny McLane is a 36 year old native of Iowa and has a knack for research on cars and anything and everything about it. She works full time as a Market Analyst for one of the leading car parts suppliers in the country today.
Big Three Lose Ground in Home Market
When the U.S. sales figures for June were released, three things were made apparent: the market is down; pickups need more incentives to sell; and domestic automakers are losing ground in their home market.
In June, Detroit’s Big Three was deeply wounded again by declining sales while the Toyota Motor Corp., Honda Motor Co., and the Nissan Motor Co. saw double-digit increases. The General Motors Corp. sales fell 21.3 percent compared with June of 2006, while the Ford Motor Co.’s sales dived 8.1 percent and the Chrysler Group’s dropped 1.4 percent. Meanwhile, Nissan posted an enormous 22.7 percent raise, Toyota saw a 10.2 percent gain, and Honda sales rose 11.5 percent.
According to Autodata Corp., Ford barely managed to hold off Toyota as the nation’s second largest auto seller in June and for the first half of the year, but Toyota narrowed the gap from 319,208 vehicles in the first half of 2006 to only 39,558 in the first six months of 2007. The declines for GM and Ford came as they continued to wean themselves from rental car companies.
Paul Ballew, GM’s executive director of global market and industry analysis, blamed the decline on the company’s planned reduction in fleet sales and a tough comparison with June of 2006, when the company offered a big 72-hour sale.
GM also was surprised that Toyota offered zero-percent financing for 60 months, which cut into GM’s pickup truck sales, Ballew said. The company may wind up altering its strategy of offering fewer incentives on pickups, he said. “If we have to make some changes in our incentive play, we will, because we are not going to cede ground in a category that we feel we’re best in class in,” he said.
GM’s top-selling pickups, the Chevrolet Silverado and GMC Sierra, saw declines of more than 20 percent, while sales of the Toyota Tundra increased 146.3 percent. According to the Edmunds.com automotive Web site, GM had about $3,600 worth of incentives on the Sierra and Silverado 1500 models, but Toyota bumped its Tundra incentives to an average of just over $5,000.
The largest American automaker said that a bright spot was its new large crossovers, the Saturn Outlook, GMC Acadia and the Buick Enclave, all of which are selling faster than the company can make them.
Then again, Ford said that sales of its F-Series pickup, the best-selling vehicle in the U.S., dropped 0.5 percent. But its Focus small car increased by 20 percent. Trusted Ford spoiler, powerful engines, efficient radiator, and other auto parts pushed the car’s sales upwards.
Ford’s daily rental sales dropped 39 percent compared with a year ago as it continues toward its goal of sinking rental car sales, reducing such sales by 89,000 during the first half of the year and 22,000 in the month of June. “It more than accounts for the decline in Ford sales this month,” said George Pipas, Ford’s top sales analyst.
Additionally, the DaimlerChrysler AG said that Chrysler car sales were up 55 percent but truck sales nearly offset the gain. Jeep brand sales were up 19 percent, led by the new four-door Wrangler, the company said.
Jim Lentz, the executive vice president of Toyota’s U.S. division, said that the automaker expects to reach its goal of selling 200,000 Tundras this year. It hopes to reduce incentives as awareness grows but also could respond if the competition makes changes. “It all depends on what they do with their incentives, what the segment is doing, and what the customer is demanding,” Lentz said. The Japanese automaker had the best June ever for its car sales, which were up 8.9 percent over the same period in 2006.
About the Author
Anthony Fontanelle is a 35-year-old automotive buff who grew up in the Windy City. He does freelance work for an automotive magazine when he is not busy customizing cars in his shop.
