January Sales Pushed Ford To No.4 Spot
The Toyota Motor Corp., along with DaimlerChrysler AG, seems to be enjoying a nice start of the year due to sales increase. The former reported a 9.5 percent increase while the latter boasted a 3.2 percent rise. On the other side of the picture, General Motors Corp. and Ford Motors Co. are still in pain because of the never-ending sales drop. GM reported a 16.6 percent drop while Ford yields a much painful fall by 19 percent.
Ford’s sales drop allowed Toyota to seize the number two automaker spot in the United States. But it does not end there. The fall was so bad that Ford was also passed by DaimlerChrysler on the way to the top. As a result, Ford was pushed to the number four spot for the month of January.
Ford is on the verge of falling apart or just groping in the dark but the company is definitely far from the light at the end of the tunnel. Times are tough for the company and the fact is worsened by other factors like gasoline prices and strong competition. Its turnaround plan is giving slow results. It can be recalled that the automaker resorted to plant closures and job cuts to save the ailing company from further devastation. Ford also cut low-profit rental car sales and curbed its dependence on incentives.
Analysts in the industry predict that Toyota will takeover Ford’s post as the second largest automaker worldwide this year. Ford, which has reported .7 billion loss - so far the greatest loss - in its 103 years of existence, said that it will be concentrating on returning profitability in North America.
“Where we are in sales races and sales rankings or where people forecast that we’re going to be is a distraction that we’re not going to be bothered with,” George Pipas, Ford’s U.S. sales analysis manager, said during a conference call with industry analysts and reporters. “We’ve got a job to do in North America, and that is all we are focused on.”
Ford reported that its sales to rental companies were down by 65 percent last month from January of 2006. “Excluding fleet sales, the total was down 5 percent, but showed growth in mid-sized cars and new crossover vehicles,” Pipas added. GM, which also reported a sales drop, is currently working on weaning itself from rental car companies.
Toyota continues to yield positive sales results that boosted its standing in the automotive hierarchy. DaimlerChrysler, Nissan and Honda also reported sales boosts in January. Nissan reported a 8.9 percent sales increase. Honda, on the other hand, had a 2.5 percent raise.
Economists and analysts alike announced their positive predictions in favor of Toyota. Jesse Toprak, chief economist for the Edmunds.com auto Web site, said Ford could pass Toyota again for a few more months — but not for long. “By summer, Toyota will be in the No. 2 position permanently,” he predicted.
“I would conclude that January certainly was not a stellar month,” said Paul Ballew, GM’s executive director of global market and industry analysis. He added that the company did well in some segments when fleets were excluded, part of its strategy to reduce low-profit sales to rental companies during the first half of the year. “GM’s rental sales,” Ballew said, “were down about 40 percent from January of last year as the company tries to build its brands and boost resale values. That’s consistent with our aggressive reduction plan that we began two years ago.”
Ford is amenable to a future weakness in new home construction to impair full-size pickup sales through the first half of the year. Ford brands are also concentrating on the improvement of its distinct lineups. Volvo C70 parts, for instance, are now made more trendy and functional to cater to a broader customer base.
About the Author: Glady Reign is a 32 year old is a consultant for an automotive firm based in Detroit, Mi. she is a native of the motor city and grew up around cars hence her expertise in the automotive field.