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So, can the Fusion and Five Hundred reverse this trend?

From the NYTimes:

Car Sales Rise 2.3% in January, but Ford Takes a Fall

Published: February 2, 2005

DETROIT, Feb. 1 - Month after month, Detroit continues to lose American customers to Asian competitors.

Last month, it was the Ford Motor Company that lost the most, with sales falling 4.9 percent in January compared with the same month a year earlier, Ward's AutoInfoBank reported Tuesday. And financial analysts are beginning to worry about the sales pace of some of Ford's new products.

"Ford's retail share losses are alarming," said Stephen Girsky, an analyst at Morgan Stanley. "Their retail sales are down 11 of the last 12 quarters. How does your dealer base generate profit and cash flow?"

Over all, industry sales rose 2.3 percent in January, traditionally the industry's weakest month, from the month a year earlier. Sales for last month came in at a seasonally adjusted annual selling rate of 16.2 million, according to Ward's AutoInfoBank. That was considerably below the sales rate of 18.3 million vehicles of December, when year-end deals helped results. Sales results calculated by Ward's are adjusted for the number of selling days in a particular month.

The industry expects sales to pick back up and keep pace this year with the strong levels of last year. But sales are not expected to grow beyond the nearly 17 million cars and trucks sold in 2004. In an industry with the capacity to make roughly 20 million vehicles, buying a car is expected to continue to become cheaper as competition intensifies..

"Most people are saying a flat year, maybe up 100,000 units, but that's what we're looking at right now," said Robert Cosmai, the president and chief executive of Hyundai Motor America. Hyundai has been one of the fastest-growing automakers and is aiming for 16 percent sales growth this year. If every maker met its goals, Mr. Cosmai said, "we'd probably have sales of 20 million."

Since that is not going to happen, most analysts expect that Ford and General Motors will continue to lose market share, and that other struggling automakers, notably Mitsubishi, will continue to post declines.

One Detroit company showing resilience has been the Chrysler division of DaimlerChrysler, which has been bolstered by a rejuvenated sedan and minivan lineup. In January, sales at DaimlerChrysler, which includes Mercedes-Benz, were up 7 percent from a year earlier.

At G.M., sales rose 1.1 percent in January, but the company said it was cutting its first-quarter production plans even more than previously thought. G.M. also said it would bring back rebates ranging from $750 to $1,000 that it had offered in December on crucial new models like the Chevrolet Cobalt, the Pontiac G6 and the Buick LaCrosse.

Sales at Nissan rose 15 percent, Toyota sales rose 6.2 percent and Honda sales fell 2.1 percent.

Looking at Ford, financial analysts said that three major new products, built at a plant in Chicago, appeared to be selling slowly. The vehicles - the Ford Five Hundred and Mercury Montego sedans and the Ford Freestyle crossover wagon - are cornerstones of Ford's efforts to recapture the American car buyer from Asian automakers. But taken together, the three vehicles had fewer sales than the aging Ford Taurus in January, though the majority of Taurus models are sold at cut-rate prices to corporate and rental car fleets.

"The Ford numbers looked particularly bad to me, and Chrysler's looked strong," said David Healy, an analyst at Burnham Securities. "Ford to me looks as if the Chicago products are off to a slow start."

On a conference call Tuesday to discuss Ford's sales results, Rob Hinchliffe, an analyst at UBS, asked the company: "What gets the pace going a little bit?"

George Pipas, Ford's chief industry sales analyst, responded that the products were building momentum and were on track to reach the company's goal of combined sales of more than 200,000 this year.

"January was a weak month. There's no point in sugarcoating the result," he also said, speaking of Ford generally, but he added that new vehicles were a bright spot and sales of them should be expected to increase at a steady pace. He likened Ford's challenge in selling cars to Nissan's recent challenge in trying to introduce its first large pickup truck.

"Ford's biggest challenge is to persuade customers that we have a serious passenger car," he said. "When you think truck, you think Ford, but there are very few customers who think in the blink of an eye, 'Well, gee, I have to try out the Ford Five Hundred,' and we know that."
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