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Ford has low rate for updating its 2008-11 vehicles, forecast shows

From freep| May 23,2007

Last year, Ford Motor Co. said it would revamp its entire lineup of Ford, Mercury and Lincoln vehicles by 2010 in an effort to win over consumers and become profitable again.

But Ford still placed last among major automakers in its projected product replacement rate through 2011, according to the annual Car Wars report for 2008-11 from Merrill Lynch.

The brokerage firm said Ford would replace 57% of its product between 2008 and 2011 with entirely new models or next generations of existing models.

Merrill Lynch's annual analysis suggests there is a strong correlation between the percentage of new models and how much market share an automaker gains or loses, with the freshest lineups doing the best.

The industry average for replacing vehicles is 67% in this year's report, with Honda and DaimlerChrysler leading the industry in revamping its models. While Toyota performed exactly in line with the industry average, General Motors Corp. and Nissan placed just below that, with replacement rates of 66% and 63%, respectively.

But Ford was conspicuous in the report -- with results that do not bode well for the future.

Aside from its low product replacement rate, Ford is also expected to have the oldest showroom age during the 2008-11 period, of about 3.7 years. That compares with an industry average of 2.9 years. Showroom age is the number of years on the market for the average model in an automaker's showroom.

"Ford is under-spending on product and its lineup is dominated by one platform, the F-Series," the report says. "We expect Ford will continue to lose market share over the forecast period, despite the new F-150 launch."

Ford spokesman Mark Schirmer said Ford has seen the report and does not agree with its findings.

"The industry has a lot more factors that dictate share gain or loss. It isn't as simple as replaced cars," he said, noting the Ford Fusion's success.

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