Automotive Digital Marketing

Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders

Loading... Be Patient!

Ford Benefits as GM, Chrysler Stumble - Why Are So Many Car Buyers Switching to Ford?

Union Givebacks, Rising Market Share Are Tied to Rivals' Bad News; Why Some Shoppers Switch to Ford
By MATTHEW DOLAN

Ford Motor Co., which hasn't taken a dime of government bailout loans, is benefiting from the troubles of its two cross-town competitors in Detroit, General Motors Corp. and Chrysler LLC.

GM and Chrysler are required to seek cost concessions from the United Auto Workers union under the terms of their federal loans. That allowed Ford to open parallel talks with the UAW, which has a history of working out the same conditions at each company.

This week, Ford and the UAW reached an agreement to cut pay for laid-off workers, ease work rules and eliminate wage increases tied to the cost of living -- two days before GM and Chrysler reached the same deal.
[Ford and GM and bailout] Associated Press
Ford CEO Alan Mulally, left, and GM CEO Rick Wagoner at the Detroit auto show last month. Ford has been winning more U.S. customers.

At the same time, while GM and Chrysler have been hit with a steady stream of negative news -- including growing concern they may need to file for bankruptcy protection -- Ford has been having more success at luring away its competitors' customers.

Ford's share of the U.S. retail market rose in each of the past four months, while GM's and Chrysler's fell, Ford said.

In January, 45% of Ford buyers turned in cars or trucks of other manufacturers, up from 38% in August, according to Edmunds.com, an auto-shopping Web site. Meantime, the "conquest rate" for GM's Chevrolet was 43% last month, down from 49% in August, and for the Chrysler brand, the conquest rate was 60% last month, down from 67% in August, according to Edmunds.

"That's a sign that there is something definitely going on for Ford," said Jesse Toprak, an analyst at Edmunds Inc.

For some domestic-car buyers, the bankruptcy talk has been enough to cause them to defect to Ford. John Grassi of Warren, Mich., recently turned in his leased Dodge Grand Caravan minivan and replaced it with a Ford Fusion.

"The future of GM and Chrysler certainly played a part in my decision," said Mr. Grassi, 50 years old, who works for Warren's parks and recreation department. "Ford seems to be the most sound in terms of staying solvent. I mean, you look at your warranty and you want that warranty to be good."

Still, Ford has many challenges. Edmunds's Mr. Toprak said the company is "weighed down" by the perception of many consumers that it is in the same boat as GM and Chrysler. All auto makers are suffering from the recession and credit crunch, which have sent sales plummeting. In January, Ford's sales were down 40%. And the company continues to post huge losses, including $5.5 billion in the fourth quarter, which are eating up its cash.

Ford isn't assuming its trend of recent market share increases will continue. "This market provides limited opportunities. You can't will yourself to higher sales," said Ford sales analyst George Pipas.
[ford and car market share]

Ford has told the federal government it doesn't need loans for now, mainly because it raised about $23.5 billion in 2006 by mortgaging almost all of its plants and assets. The company said it had $13.4 billion in cash as of Dec. 31. Its credit lines dried up in January.

So far, GM has won $13.4 billion in loans from the Treasury Department, and this week asked for as much as $16.6 billion more in a revitalization plan it was required to give the government. Chrysler has received $4 billion and has asked for $5 billion more.

The UAW concessions reached this week could save the auto makers hundreds of millions of dollars a year -- for Ford, a windfall from its rivals' struggles.

The union agreement "was styled in such a way to benefit all three companies," UAW President Ron Gettelfinger said in an interview Thursday with Detroit radio station WWJ.

The terms of the government loans also require GM, Chrysler and the union to work out a way for the companies to put less cash and more stock into trust funds to cover the cost of health care for retired union workers. That has opened the door for similar talks at Ford, although no agreements have been reached yet.

View Interactive

The terms of the government loans also require GM, Chrysler and the union to work out a way for the companies to put less cash and more stock into trust funds to cover the cost of health care for retired union workers. That has opened the door for similar talks at Ford, although no agreements have been reached yet.

Ford also is believed to be seeking concessions from its bondholders and dealers, also required by the loans given to GM and Chrysler. Ford has been less forthcoming about the state of these negotiations. But Ford Chief Executive Alan Mulally said during an earnings call last month that "I really believe from the ongoing conversations that we are having with all the stakeholders and the U.S. government that as we go through this and we continue to take the actions that we need to take that we will not be disadvantaged."

Meanwhile, Ford seems to have made headway with customers as both GM and Chrysler nearly ran out of money over the past few months. In Centerline, Mich., Bob Thibodeau said he's noticed more owners of other makes shopping at his Ford dealership. "We have certainly seen a lot more cross-shopping in recent months like we've never seen before," he said.

Ford also may be seeing more customer traffic because it just launched a redesigned version of its F-150 pickup truck, the top-selling vehicle in the country, and its finance arm is healthier than the lenders GM and Chrysler work with, GMAC LLC and Chrysler Financial.

Write to Matthew Dolan at matthew.dolan@wsj.com

Corrections & Amplifications
Ford Motor Co. had $13.4 billion in cash as of Dec. 31, 2008, but still had $10.1 billion in lines of credit. A previous version of this article implied that its last credit lines had also been drawn down by that time, a move that did not happen until January.
*******************************************************************************

About the Automotive Digital Marketing Professional Community

The Automotive Digital Marketing (ADM) Professional Community website is built on a perpetually growing"Viral Expansion Loop" Networking Platform and serves Car Dealers, Dealership General Managers and their management teams, including Internet Sales Managers, BDC Managers, Marketing Managers, Sales Managers, Service Managers, Service Advisors, Parts Managers, Fixed Operations Directors and their teams. Launched at the beginning of January 2008, ADM has emerged as a valuable and proven resource for the entire spectrum of automotive marketing and Internet sales related professionals. Interactive Media and eCommerce Professionals at car companies (OEM) and tier 1 and 2 advertising agencies who want to see, hear and read what the best Digital and Interactive Marketing professionals in the automotive industry have to say about relevant and timely topics visit ADM on a regular basis or subscribe to the many RSS feeds available within the ADM community.

ADM is a great place for Tier 1, Tier 2 and Tier 3 automotive marketing and advertising practitioners, as well as Webmasters, dealer web site managers, automotive software developers and information technology solution designers to get new ideas and stay up to date on the challenges facing retail automotive Internet sales practitioners. ADM serves Automotive CRM and Lead Management suppliers, vendors, application developers and their affiliated sales professionals as an online exchange for strategy, tactics, best practices, files, resources and contacts that create powerful networking relationships within the auto industry.

NETWORKING OPPORTUNITIES
Did you know there are now over 2,000 members on Automotive Digital Marketing Professional Community?
Have you reached out to connect with important ADM member contacts by asking them to be your Friend?

AUTOMOTIVE IMAGE AND PHOTO RESOURCES
Did you know that there are over 4,000 photos listed on Automotive Digital Marketing Professional Community?
And, do you know that many of these images are actually charts and graphs of the latest marketing trends and research? Did you know that many of these photos are actual ads used by dealers that worked exceptionally well? There have been over 4,000 photos uploaded and made available for use by all ADM members.

AUTOMOTIVE VIDEO FILE HOSTING
Did you know that there are more than 650 videos on Automotive Digital Marketing Professional Community?
Have you seen how many of those videos are actual examples of marketing campaigns and business processes used successfully by some of the leading and most successful dealers in America?

GET ACCESS TO AUTOMOTIVE ARTICLES AND PUBLISH YOURS
Did you know that there are over 450 blog posts on Automotive Digital Marketing Professional Community?
When was the last time you posted a blog entry and let important ADM industry professionals know what you are up to? Have you checked ADM for the latest articles published by writers who walk the talk? Members have created more than 460 blog posts within their ADM provided websites that feature online file storage and personalized blog hosting at no cost to ADM members.

SOMETIMES CONTROVERSIAL, BUT ALWAYS FASCINATING AUTOMOTIVE DISCUSSION FORUM
Did you know that there are over 400 forum topics on Automotive Digital Marketing Professional Community?
Have you checked the forum lately to see what your associates, clients and colleagues are saying?
Have you posted a forum discussion to see what other professionals have to say about the topic?

There have been over 400 discussions started and still active with ongoing comments and information being published daily within the ADM Forum.

SPECIALIZED AUTOMOTIVE PROFESSIONAL GROUPS
Did you know that there are more than 25 professional groups on Automotive Digital Marketing Professional Community?
Have you joined any groups so that you can send messages to all other group members?

EVENT CALENDAR FOR AUTOMOTIVE PROFESSIONALS
Did you know that there are Important Upcoming Automotive Digital Marketing Events listed on Automotive Digital Marketing Professional Community?
Have you posted what you or your organization considers to be important upcoming events on the ADM calendar so that other professionals will know about them, consider attending and register their intent? ADM members can create calendar events using the ADM site application that allows image and logos, links to registration pages, location maps that integrate with Google Maps, Outlook Calendar integration, invitation mailings using uploaded email lists, RSVP tracking and event management features and a whole lot more.

RADIO SPOTS AND AUTOMOTIVE PODCASTS
Did you know that there are more than 500 MP3 audio files on Automotive Digital Marketing Professional Community? Have you checked out what other automotive professionals are listening to?
Did you know that many of these MP3 files are automotive marketing and Internet sales best practice Podcasts, and examples of highly effective radio spots, along with powerful and engaging dealer website soundtracks?

If you are interested in visiting and perhaps joining the Automotive Digital Marketing Professional Community, go to: http://www.AutomotiveDigitalMarketing.com

> The ADM Professional Community is all about car dealers using the web to generate sales leads and Internet sales. Automotive Internet sales and digital marketing professionals working with Acura, Audi, BMW, Chrysler, Dodge, Ford, Toyota, Chevrolet, Chevy, Honda, Nissan, GMC, GM, Mercedes-Benz, Lincoln, Mercury, Mini, Jeep, Volvo, Saab, Hummer, Cadillac, Buick, Pontiac, Saturn, Lexus, Porsche, Hyundai, Kia, Suzuki, Subaru, Volkswagen and other automotive franchises are ADM's most prolific members. Used car and automotive remarketing professionals will find a treasure trove of data, files, best practices, strategies, tactics and great contacts within the industry available at ADM.

ADM is proud to serve as an online meeting place, networking tool and idea exchange for automotive dealership suppliers and advertising agencies who provide car dealer Internet sales and web marketing solutions, such as ADP Dealer Services, JW Thompson, Zimmerman, The Cobalt Group, The Reynolds and Reynolds Company, BZ Results, ADP Dynamic Websites, Dealer.com Automotive Websites, Dealerskins, Izmocars and Izmo CRM, TK CarSites, Autobase, DealerTrack, Arkona, Reynolds Web Solutions, Clickmotive, Xi Group and other dealership technology suppliers and vendors.

Views: 23

Tags: Car Buyers, Chrysler Stumbles, Ford Market Share, Ford Motor Company, Ford sales increase, GM sales declline

Comment

Oops... You need to stop "Lurking" on ADM and become a more genuine Automotive Professional by completing your membership registration. As a registered ADM Member, you can post comments, publish your own articles (be a star!) and start Forum discussions. Stop being an online "Peeping Tom" and JOIN ADM RIGHT NOW!

Join Automotive Digital Marketing

Automotive Professional Network and Resource Exchange for Car Dealers, Managers, OEM and Marketing Practitioners seeking Best Practices.

ADM Sponsor

William B. Terry
Rated by Super Lawyers


loading ...

Please Consider Automotive Marketing Professional Community Sponsors

ADM Badge

Loading…

Based On Your Interests...

ADM Consulting, LLC

Onsite/Offsite Combination ADM Consulting, LLC Professional Services
Select the maximum monthly investment you plan to make
$USD
Sign up for

Automotive Marketing Tools

Get ADM Toolbar

Click here to take the ADM Member Survey

Getting too many emails from ADM? Click mailbox below to control which types of alerts and updates you are sent......


Instagram

SaveSave

ADM Professional Services
Phone Consultation
Topic or Issue:

Top Automotive Marketing Forum Discussions

1. BDC or Virtual BDC

Posted by Peter Stratton on February 26, 2020

Share the Best Content w/AutoMarketing Community

© 2020   Created by Ralph Paglia.   Powered by

ADM Badges  |  Report an Issue  |  Terms of Service