Ford might be forced to offer incentives
Ford, after increasing its share of the U.S. light-vehicle market for the last two years, is falling short of its retail goal this year, which may put pressure on the automaker to offer larger discounts - the very practice that bankrupted the American automotive industry in the first place.
In the first quarter, Ford had 13.6% of the U.S. retail auto market, which excludes sales to fleet buyers, according to researcher Edmunds.com. That trailed the 14.1% target Ford's board set for executives to match or exceed this year, according to the automaker's government filings.
Ford's share slipped as General Motors increased sales incentives 11% in the first three months of the year, according to Autodata of Woodcliff Lake, N.J. Ford, which reduced discounts by 9.1% in the first quarter, saw its total U.S. market share fall to 16.2% from 16.8% a year earlier, Autodata said.
"We believe Ford's management could be forced to become more aggressive with incentives to avoid additional market-share loss," Joseph Amaturo, an analyst with the Buckingham Research Group who rates Ford "neutral," said Tuesday. "We are increasingly concerned about net-price erosion."
Ford President and CEO Alan Mulally, who has emphasized profits over market share, said Ford will maintain pricing discipline.
"The most important thing about our plan is profitable growth, so that leads us to tremendous discipline on everything about the business," Mulally told reporters Wednesday in Detroit. "The No. 1 thing is to match the production capacity to the real demand."