Last Updated: September 10. 2010 1:00AM
Ford to roll back lineup revisions
But automaker's still expected to make more changes than rivals
Alisa Priddle / The Detroit News
Ford Motor Co. will scale back slightly on vehicle updates next year as the automaker continues to cut costs and focus on reducing debt.
Ford is replacing 33 percent of its product line in 2010, but "it won't be as much" next year, Ford Americas President Mark Fields said Thursday.
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Fields did not elaborate in his presentation at a New York investors conference sponsored by Credit Suisse, but he provided the first glimpse of the scope of Ford's 2011 model year changes as the company pursues a robust global product plan and aggressive debt reduction.
Ford is still expected to do more than its competitors, according to Car Wars, an annual report prepared by Bank of America Merrill Lynch that evaluates the strength of automakers' U.S. product pipelines. The study, released in May, forecasts that Ford will replace a third of its lineup in 2011 and continue to be more aggressive than the industry average replacement rate of 27 percent.
Ford's slight pullback comes as many automakers have been exercising prudence in launching new vehicles -- balancing the prevailing wisdom that a fresh showroom drives sales against the slow rebound of the economy and auto sales.
Ford's strategy is to have every new vehicle come from a global platform by 2013, part of its effort to reduce costs on everything from engineering to parts purchasing. But the automaker is also working to eliminate its $5.4 billion in debt so it is no longer at a disadvantage compared with General Motors Co. and Chrysler Group LLC, which shed debt in bankruptcy.
After billions in losses related to a series of recalls, Toyota Motor Corp. is stretching development periods for new products to ensure quality.
Honda Motor Co. Ltd. has extended the lifecycle of core products such as the Civic, which debuts next year but had been expected much sooner.
General Motors Co. is down to four brands.
Chrysler Group LLC is the most extreme example of how bare a cupboard can get when a company is in survival mode and resources dry up. But Chrysler plans to replenish 75 percent of its lineup this year, with the bulk coming late in the year.
Product activity for the industry as a whole should accelerate for the 2011-14 model years following the lull in the past two years, Car Wars concludes.
But don't expect companies to race out of the blocks, said Joe Phillippi of AutoTrends Consulting Inc. in Short Hills, N.J.
"We're obviously not out of the woods," Phillippi said of the auto industry's slow rebound. Even as conditions improve, "the last thing you want to do is rush something today. That is how you end up with a lot of recalls."
Globally, auto sales are projected to grow by 5 percent to 10 percent this year, Fields said.
"The global economy is improving but it is uneven," he said, noting that while Asia and other emerging markets continue to flourish; the United States will experience moderate growth; and Europe is "a little bit of a worry spot," coming off its version of a "cash for clunkers" incentives.
The U.S. market has been aided because the industry has pared capacity, inventory is relatively lean and automakers have been "fairly rational when it comes to incentives," Fields said.
Countering those gains are high prices for commodities, such as steel.
apriddle@detnews.com (313) 222 - 2504
From The Detroit News:
http://detnews.com/article/20100910/AUTO01/9100332/1148/rss25#ixzz0zB0DSxPo
