A NEW BIG 3?
http://www.detnews.com/apps/pbcs.dll...702020385/1148

For the first time in recent memory, Ford Motor Co. fell to No. 4 in U.S.
auto sales behind General Motors Corp., Toyota Motor Corp., and
DaimlerChrysler AG's Chrysler Group, demonstrating just how far the
automaker has fallen as it battles to stop a decade-long decline in market
share.

At the same time, the Detroit automakers' share of the American auto market
fell to just 50.6 percent in January as they narrowly avoided selling fewer
cars and trucks than foreign makers in a month for the first time ever.

In November, Ford came in at No. 4 behind GM, Toyota, and Chrysler parent
DaimlerChrysler AG, but those results included the automakers' foreign
brands.

Last month, Ford's domestic brands -- Ford, Lincoln and Mercury -- were
outsold by Chrysler's U.S. brands -- Chrysler, Dodge and Jeep.

Ford's U.S. brand sales dropped 19.6 percent to 153,026 vehicles in January,
while demand for Chrysler, Dodge and Jeep models rose slightly to 156,308
units.

Ford sales analyst George Pipas dismissed Ford's slide in the rankings as
irrelevant. "Where we are in sales races is a distraction we're not going to
be bothered with," he said.

While analysts said Chrysler could tumble back behind Ford this year,
January's topsy-turvy numbers show how irrelevant the old realities that
once defined Detroit have become.

Ford attributed most of its January decline to a planned reduction in sales
to car rental companies, a strategy the automaker said will make it stronger
in the long run.

"(We) are focused on restructuring our business to be profitable at lower
volumes," said Mark Fields, president of Ford's Americas Group. "Our
customers benefit from this plan because their vehicles' residual values
will improve -- a trend we already are seeing with our newest products."

It was a theme echoed by rival GM, which also saw a big drop in sales that
it blamed on a deliberate cut in sales to daily rental fleets. Overall, GM's
sales were down 16.7 percent, with 242,252 vehicles sold compared to 290,935
a year ago.

Paul Ballew, GM's executive director for global market and industry
analysis, said the company has been weaning itself off the daily rental
business for the past couple of years and expects that to continue for
several more months.

"There's more tough medicine coming on the rental side," he said, adding
that GM hopes to cut its sales to rental agencies by about 200,000 units
annually.

Fleet sales are an easy way to boost market share and move inventory, but
they generally create little profit and cause a lot of damage to a brand by
driving down resale values and filling the highways with stripped-down
versions of an automaker's cars and trucks.

"It's a good sign that they're de-emphasizing fleet," said George Magliano,
director of North American auto industry research for Global Insight in New
York. "The business isn't very profitable."

Ford's sales to car rental companies were down 65 percent compared to
January 2006.

Overall fleet sales -- including those to more profitable corporate and
government fleets -- represented 28 percent of Ford sales for the month,
compared to 39 percent last January.

GM's overall fleet business was down 30 percent year-over-year, with sales
to daily rental fleets down about 40 percent.

While both Ford and GM said cutting back on sales to rental car companies is
an important part of their North American turnaround strategies, both
automakers also saw a decline last month in retail sales to consumers.

GM's retail sales were down 8 percent for the month and Ballew acknowledged
the company had been hoping for better results.

"January was certainly not a stellar month," he said. "We were modestly down
from where we expected to be."

Ford's retail sales were down about 5 percent year-over-year, proof that it
is continuing to give ground to foreign rivals including Toyota and Honda
Motor Co.

Toyota's U.S. sales totaled 175,850 units, a 9.5 percent increase that made
last month the company's best January ever.

Honda posted a more modest 2.4 percent gain, selling 100,790 cars and trucks
in January, while Nissan Motor Co. sold 82,644 vehicles -- up 8.9 percent.

Both Ford and GM suggested that Chrysler was picking up some of their
unwanted fleet sales.

"DaimlerChrysler has jumped in a big way," Ballew said. "So has
Hyundai/Kia."

But Chrysler suggested its competitors were trying to deflect attention from
their own problems.

Steven Landry, Chrysler's vice president of sales and field operations, said
his company's daily rental business was down 10 percent last month and will
continue to fall throughout 2007.

"Our overall three-year plan is to continue to bring it down over time,"
Landry said, crediting new products for most of Chrysler's gains -- a claim
supported by analyst Alex Rosten of the online auto research site
Edmunds.com.

He said daily rental companies are scaling back purchases and keeping
vehicles longer. "No one's picking up the slack because the slack isn't
there," Rosten said.

Partly as a result of declining fleet sales, GM said Thursday that it will
cut first-quarter production by another 40,000 vehicles to better match
supply with demand.

January is always a tough month to read. Bad weather often keeps retail
customers at home, and it is also the month in which automakers get the
payback for year-end sales incentives.



--
"I have tried to live my life so that my family would love me and my friends
respect me. The others can do whatever the hell they please."

Jim Higgins wrote:
Ford is in even deeper trouble than GM. GM is at least putting some
reasonable effort into competitive new products and is making great
progress in the #1 growth market, China. Ford is playing rope-a-dope
against not only the Asian companies but also GM and DCX. DCX can
afford to scale it's US operations down to a few niche products if
neccessary like the minivans, Sprinter utility van and some Chinese
imports. GM has pulled off a decent redesign of it's bread and butter
trucks, has Cadillac at least in the game, has Saturn hitting a few
solid singles and doubles and so on.

Years ago the other US makers got killed when GM and Ford waged all out
market warfare. Now you have GM and the Asians fighting it out while
Ford is caught in the crossfire without anything you can really call a
management team. The Dearborn revolving door means little real work is
being done as all the players focus on internal politics.

GM has a fighting chance of staying in the hunt, but will probably never
again be the world largest automaker once they loose that title to
Toyota this year or next.

Nissan, Mitsubishi, Suzuki & Isuzu are all also increasingly irrelevant.

Honda should buy Subaru to round out it's product line, but that seems
unlikely given the Subaru/Toyota relationship. Toyota will probably
slowly but surely bring Subaru ever closer into the family as it has
done with Hino trucks over time.

John