Ford's sales decline for 5th straight month Trucks perking along while cars sputter

February 06, 1996|By BLOOMBERG BUSINESS NEWS

DEARBORN, Mich. -- Ford Motor Co.'s sales fell 3.4 percent in January, the automaker's fifth straight monthly decline, as weak car sales continued to outweigh robust truck sales.

Ford tried to spur sales with a $600 rebate on most of its cars, but car sales still slid 9.4 percent, compared with January a year ago.

Strong sales of F-150 trucks and the Explorer sports utility vehicle helped push truck sales up 2.6 percent.

The automaker's January performance, which was in line with analysts' expectations, was the worst performance among U.S. automakers.

The auto industry's total U.S. sales dipped 1.6 percent last month compared with January a year ago, reflecting the overall slowing of the economy.

Ford shares closed unchanged at $29.875 on the New York Stock Exchange.

A Ford executive blamed the company's declining sales on its strategy to reduce sales to rental car fleets and on the harsh January weather.

"With the weather problems in the East, the month got off to a slow start," said David McCammon, Ford's vice president of finance.

"We think it was a great month, all things considered."

Sales of the company's restyled Taurus fell 3.5 percent to 30,052 cars in January, a much better showing than in the three previous months, when the new model's sales ranged from 16 percent to 35 percent lower than those of the old model.

Many dealers and customers have blamed the drop in sales to the higher price of the new model. Ford responded yesterday by saying it would introduce a new, lower-priced base model of the Taurus and its sister car, the Mercury Sable.

Mr. McCammon denied that the Taurus is overpriced. Still, he said, "I think there have been a lot of people who say the Taurus needs to [reach] price-sensitive customers. Maybe there is a buyer who would like to have something priced less with fewer options."

The new Taurus G model will start at $18,545 -- $605 less than the current base model. The new Sable G will go for $18,910, about $635 less.

They are expected to go on sale in the spring.

The switch to light trucks

Cars have been a tough sell for all of the domestic automakers as customers continue to trade in cars for light trucks, including minivans, sports utility vehicles and pickups.

"Trucks are becoming more like cars in terms of luxury options, such as leather seats and power windows," said Ron Clogg, senior manager of automotive forecasting for J. D. Power and Associates.

"Previously, a pickup truck was a pickup truck. It didn't have any of the amenities car buyers liked."

Last week, Chrysler reported a 7.1 increase in sales, led by very strong truck sales. General Motors Corp. reported a 1.8 percent decline, smaller than had been expected.

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