Ford's U.S. sales up 2.7%, half of Oct. projections Analysts call designers out of touch with buyers

November 06, 1996|By BLOOMBERG BUSINESS NEWS

DEARBORN, Mich. -- Ford Motor Co. reported yesterday that its U.S. vehicle sales rose 2.7 percent last month, about half what analysts expected, as rebates on cars failed to entice consumers.

Ford's results, coupled with a 7.5 percent drop by General Motors Corp., slowed the industry's advance to just 2.2 percent, far below the solid 7 percent increase analysts predicted.

Both Ford and General Motors Corp. suffer from the same problem: Their cars are out of touch with what buyers want, analysts said.

'Old stuff'

"Ford and GM continue to take to market a lot of product that is viewed by most people in the Baby Boomer generation as 'old stuff' -- Crown Victorias, Grand Marquis, Lincolns and Cadillacs," said Joseph Phillippi, an analyst with Lehman Brothers.

All Ford-brand cars, except the Taurus and Grand Marquis, posted sales declines in October. Ford sold 143,191 cars last month, down 3.9 percent from October last year despite rebates of $500 to $1,000.

The market clearly has shifted toward trucks, minivans and sport utility vehicles. Ford's sales of those vehicles rose 8.3 percent to 191,399. Consumers bought as many F-150 pickup trucks and Expedition sport utility vehicles as Ford could build.

"I wish we could get 100 of the new Expeditions -- people are coming through the walls for them," said Michael Healy, owner of Healy Ford in Ansonia, Conn. "On the car side, the Taurus and Escort are plugging right along, but the rest of the line is soft."

Chrysler gained

Chrysler Corp. reported Friday that October sales increased 19 percent over last year. Japanese automakers also posted strong gains.

Ford's shares rose 12.5 cents yesterday, closing at $31.63.

The company's sales have languished all year, falling 0.2 percent through October, while the industry is up 2.7 percent, according to Autodata Corp., a market research firm based in Woodcliff Lake, N.J.

Pub Date: 11/06/96

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