PhilosophyGenius
09-11-2006, 05:12 PM
Ford to shrink US dealer base over 3 yrs
By Poornima Gupta
http://news.yahoo.com/s/nm/20060911/bs_nm/autos_summit_ford_dc
DETROIT (Reuters) - Ford Motor Co. is planning to shrink its U.S. dealer network in the next three years to align distribution better with its current market share, Cisco Codina, the company's North American sales chief, said on Monday.
"We have publicly told our dealers as recently as our new model introduction video in Las Vegas last month that we would make a concentrated effort to align our sales to our number of dealers in the marketplace," Codina told the Reuters Auto Summit.
Codina said most of Ford's dealers are concentrated in metropolitan areas on the East Coast and in California, which he termed as "problem areas."
"I would probably say the East Coast is of particular importance to us and a concern," he said. "But equally we have markets in California and in other large cities that we would have to address."
Codina, however, declined to give a target for the desired number of dealers.
The Ford's sales chief initially said there were 4,600 Ford and Lincoln-Mercury dealers, with 1,500 in major metropolitan areas.
A Ford spokesman later clarified that the brands were currently represented by about 4,300 dealers.
Ford, the No. 2 U.S. automaker, has seen a protracted decline in U.S. market share, while its dealer footprint has more or less remained the same. Ford ended 2005 with a share of 17.4 percent, excluding its luxury brands, the lowest level since the late 1920s.
CAR BUSINESS IS KEY
At the end of August, Ford had a U.S. market share of about 17 percent. The company has been hit hard by a shift in consumer tastes from gas-guzzling SUVs to more fuel-efficient vehicles.
Earl Hesterberg, chief executive of auto dealership Group 1 Automotive Inc. (NYSE:GPI (http://us.rd.yahoo.com/dailynews/finance/nm/bs_nm/storytext/autos_summit_ford_dc/20250759/*http://finance.yahoo.com/q?s=gpi&d=t) - news (http://us.rd.yahoo.com/dailynews/biz/nm/bs_nm/storytext/autos_summit_ford_dc/20250759/*http://biz.yahoo.com/n/g/gpi.html)), said the key to Ford's long-term success is turning around the passenger car business.
"The big issue for Ford right now, as it is with most of the GM and Chrysler brands, is they need to get into the car business in a big way," Hesterberg told the Reuters Autos Summit in Detroit on Monday.
Group 1 is the second-largest Ford dealership group.
Building a brand image in the car segment would be a significant step to help stem Ford's U.S. share slide, but it will not be easy, said Hesterberg, who was Ford's North American sales chief prior to joining Group 1.
"Even through Ford has come to market in the last year or so with a very competitive car, the Fusion, it doesn't automatically make for dealers a top-of-mind source for cars or fuel efficient vehicles," he added.
Hesterberg said rival Toyota Motor Corp. (7203.T), a dominant player in the U.S. sedan market, built its image on fuel efficiency and value over a period of 20 years.
Ford has recently seen some success in its new line-up of mid-size cars -- Fusion, Milan and Zephyr -- and its revamped Mustang sports car is a bona fide hit. The cars have helped Ford gain some market share in the U.S. sedan segment but not enough to offset declining SUV sales.
Codina said Ford was seeing the rate of decline in U.S. market share slowing, partly due to higher new sedan sales.
Ford has seen 1 percentage point of share decline each year in the last couple of years, though Codina expects the share decline this year to be less than that. The Ford sales chief said he expects incremental sales from new launches this year, particularly the Edge crossover SUV. He is targeting sales of 100,000 Edges in its first full year.
By Poornima Gupta
http://news.yahoo.com/s/nm/20060911/bs_nm/autos_summit_ford_dc
DETROIT (Reuters) - Ford Motor Co. is planning to shrink its U.S. dealer network in the next three years to align distribution better with its current market share, Cisco Codina, the company's North American sales chief, said on Monday.
"We have publicly told our dealers as recently as our new model introduction video in Las Vegas last month that we would make a concentrated effort to align our sales to our number of dealers in the marketplace," Codina told the Reuters Auto Summit.
Codina said most of Ford's dealers are concentrated in metropolitan areas on the East Coast and in California, which he termed as "problem areas."
"I would probably say the East Coast is of particular importance to us and a concern," he said. "But equally we have markets in California and in other large cities that we would have to address."
Codina, however, declined to give a target for the desired number of dealers.
The Ford's sales chief initially said there were 4,600 Ford and Lincoln-Mercury dealers, with 1,500 in major metropolitan areas.
A Ford spokesman later clarified that the brands were currently represented by about 4,300 dealers.
Ford, the No. 2 U.S. automaker, has seen a protracted decline in U.S. market share, while its dealer footprint has more or less remained the same. Ford ended 2005 with a share of 17.4 percent, excluding its luxury brands, the lowest level since the late 1920s.
CAR BUSINESS IS KEY
At the end of August, Ford had a U.S. market share of about 17 percent. The company has been hit hard by a shift in consumer tastes from gas-guzzling SUVs to more fuel-efficient vehicles.
Earl Hesterberg, chief executive of auto dealership Group 1 Automotive Inc. (NYSE:GPI (http://us.rd.yahoo.com/dailynews/finance/nm/bs_nm/storytext/autos_summit_ford_dc/20250759/*http://finance.yahoo.com/q?s=gpi&d=t) - news (http://us.rd.yahoo.com/dailynews/biz/nm/bs_nm/storytext/autos_summit_ford_dc/20250759/*http://biz.yahoo.com/n/g/gpi.html)), said the key to Ford's long-term success is turning around the passenger car business.
"The big issue for Ford right now, as it is with most of the GM and Chrysler brands, is they need to get into the car business in a big way," Hesterberg told the Reuters Autos Summit in Detroit on Monday.
Group 1 is the second-largest Ford dealership group.
Building a brand image in the car segment would be a significant step to help stem Ford's U.S. share slide, but it will not be easy, said Hesterberg, who was Ford's North American sales chief prior to joining Group 1.
"Even through Ford has come to market in the last year or so with a very competitive car, the Fusion, it doesn't automatically make for dealers a top-of-mind source for cars or fuel efficient vehicles," he added.
Hesterberg said rival Toyota Motor Corp. (7203.T), a dominant player in the U.S. sedan market, built its image on fuel efficiency and value over a period of 20 years.
Ford has recently seen some success in its new line-up of mid-size cars -- Fusion, Milan and Zephyr -- and its revamped Mustang sports car is a bona fide hit. The cars have helped Ford gain some market share in the U.S. sedan segment but not enough to offset declining SUV sales.
Codina said Ford was seeing the rate of decline in U.S. market share slowing, partly due to higher new sedan sales.
Ford has seen 1 percentage point of share decline each year in the last couple of years, though Codina expects the share decline this year to be less than that. The Ford sales chief said he expects incremental sales from new launches this year, particularly the Edge crossover SUV. He is targeting sales of 100,000 Edges in its first full year.