Car sales down, but Ford is catching its Japanese rivals
Overall sales plummeted with the end of 'cash for clunkers.' Ford has taken a hit too, but it's still doing better than Toyota, Honda, or Nissan.
September was a dismal month for just about everyone who sells cars in the US, according to company reports on Thursday. But the sales implosion, caused by the end of the "cash for clunkers" incentive program, masked a longer-term shift in the car market: Ford is pulling away from GM and Chrysler.
Among the three Detroit-based carmakers, Ford is the one not getting a government bailout.
It's also the one whose performance is looking more like Japanese rivals than like its Detroit brethren.
First the bad news: Overall US car sales took a dive, down 41 percent in September from the pace seen in August, according to Ward's Automotive Group. That's because consumers back then were scrambling to trade in high-mileage "clunkers" for a tax credit on the purchase of a new car.
When you add up the first nine months of the year as a whole, GM's sales are down 36 percent from its 2008 levels, Ward's says. Chrysler's are down 40 percent. Ford's sales are down just 22 percent.
That doesn't sound great, but in this deep recession for the industry, Ford’s sales have held up better than Toyota, Honda, or Nissan. South Korea's Hyundai and Kia have actually risen, and Volkswagen's sales are down 9 percent. Put another way, Ford is gaining market share this year, while GM and Chrysler have been losing share.
The "clunkers" program was a portion of the economic stimulus plan – and was in effect a bailout for the whole industry, Ford and the foreign carmakers included. But rescue plans are still in place for GM and Chrysler, with billions in government aid. (The government also is subsidizing next-generation auto technology, and Ford is getting a piece of that pie.)
Ford also happens to be the one Detroit carmaker headed by someone from outside the industry. Alan Mulally parachuted in from the aerospace industry a couple of years ago and has focused on streamlining Ford's global product design system and bolstering the firm's finances. He took out a big loan before the deep slump in sales -- where GM and Chrysler ran out of cash during hard times.
All this doesn't mean the way forward is easy for Mr. Mulally.
But it's tougher for the cross-town rivals. Especially Chrysler, the smallest of the three.
"The level of cost consciousness at this house is probably at a historical high," Chrysler CEO Sergio Marchionne said Thursday. He also heads Fiat, which formed a major alliance that kept Chrysler alive earlier this year. "The real important issue is to try and build a future."
With or without government aid, that's what Detroit will be working on for a while.
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