Ford doesn’t hit retail goal this year, insists pricing strategy will remain

Article by Christian Andrei, on April 15, 2011

Ford Motor Co. faces pressure to offer bigger discounts as it failed to attain its retail goal this year. It had been able to raise its share of the light-vehicle market in the U.S. in the past couple of years.

Researcher Edmunds.com said that in the first three months of 2011, it had 13.6% of the U.S. retail auto market (excluding sales to fleet buyers). Ford’s filings indicated that it didn’t reach the 14.1% target that was set by Ford's board.

Autodata Corp. said that Ford's share fell as General Motors Co. increased sales incentives by 11% in the first quarter. Autodata said that Ford’s total U.S. market share dropped to 16.2% from 16.8% the previous year.

Ford had cut discounts by 9.1% in the first quarter. In a research note on April 12, Joseph Amaturo, a Buckingham Research Group analyst, said that Ford's management may have to “be more aggressive with incentives” to stop the further loss of market share.

Amaturo, who has given Ford a “neutral" rating, said that “net-price erosion" is a serious concern. CEO Alan Mulally, who is focusing on profits over market share, said that how Ford prices its products will be unchanged.

On April 13 in Detroit, Mulally said that Ford’s plan puts a lot of importance on profitable growth and that what they aim for is for production capacity to match the real demand.

Topics: ford, price

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