Ford says its prices rose $700 while US market unchanged

Bloomberg News - Ford Motor Co. said it has been selling vehicles in the U.S. for $700 to $800 more in January and February than it did a year earlier, while industrywide prices have remained mostly unchanged.

It is a "good bet" that Ford lost U.S. market share in February, said George Pipas, Ford's sales analyst. Ford Chief Executive Officer Alan Mulally has emphasized profitability over gaining market share at any cost, Pipas said.

Ford's rising prices were driven by its decision not to engage in a "price war" with General Motors Co., Pipas said today in a briefing with reporters in Dearborn, Michigan, where the company is based.

GM "says they are using targeted incentives; I think I heard that term before bankruptcy," Pipas said, referring to GM's 2009 Chapter 11 reorganization. "GM's incentives are very targeted toward their owners, so what would be the point of targeting their owners? That's very expensive."

Ford also is getting about an extra $6,000 for each new version of the Explorer sport-utility vehicle it sells, Pipas said.

Ford improved the most of any automaker in Consumer Reports's annual automaker rankings, bolstered by gains in reliability, the magazine said today. Ford ranked fifth overall following Honda, Fuji Heavy Industries Ltd's Subaru unit, Toyota Motor Corp. and Volvo Cars, which Ford sold to China's Zhejiang Geely Holding Group Co. last year.

The company's Mustang was the No. 1 sports-car pick, placing a U.S. manufacturer at the top of that list for the first time in six years.

2009 Share Gain

Ford's U.S. sales rose 9.2 percent in January, according to Bloomberg, less than the industrywide gain of 17.3 percent. Last year, new models such as the Fiesta subcompact and the redesigned Edge sport-utility vehicle enabled Ford to increase U.S. market share to 16.7 percent, from 15.5 percent in 2009, according to researcher Autodata Corp. of Woodcliff Lake, New Jersey.

Ford, the second-largest U.S. automaker, reported a 79 percent fourth-quarter profit decline Jan. 28, as its European unit had an unexpected loss and new models drove up costs. For the year, Ford earned $6.6 billion, the most since 1999.

Ford fell 10 cents to $14.97 at 2:55 p.m. in composite trading on the New York Stock Exchange. Ford’s shares fell 10 percent this year through Feb. 25.

Ford has gained consumer consideration because it managed to avoid the bankruptcies that befell its U.S. rivals in 2009. The automaker borrowed $23 billion in late 2006 before credit markets froze, which gave it the cash it needed to weather the recession and invest in new models.