Inventories Swelling

[G-BIRD]

Here is an article I thought the gang might like to see:


Ford T-Bird sales not flying

Inventories swelling; discounting looming
January 30, 2003

BY MARK PHELAN AND JEFFREY MCCRACKEN
DETROIT FREE PRESS BUSINESS WRITERS

Less than 18 months after it went on sale to wide acclaim, the Ford
Thunderbird faces swelling inventories and the prospect of discounting below
sticker price.

The luxury roadster finds itself struggling to reach its sales target.

"We are a little concerned about it. It's not doing great," said Michael
Kennedy, chairman of Ford's dealer council and owner of four
Philadelphia-area Ford dealerships.

Despite that, Ford Motor Co. says the Thunderbird isn't crashing to earth.

"Our inventory of Thunderbirds is fewer than two cars per dealer," Ford
spokesman Jim Cain said Wednesday. "Some dealers may be carrying higher
stock levels than usual to prepare for spring," he added, noting that nearly
40 percent of convertibles are sold from June through September.

Ford had a 133-day supply of Thunderbirds at the end of December, compared
with a 26-day supply a year earlier. It hit the market in August 2001.
"Days' supply for a specialty car is a very inappropriate measure," said
George Pipas, Ford sales and analysis manager.

"I've only got about 6,600 Birds in stock . . . I'm completely comfortable
with that."

The Thunderbird was Motor Trend magazine's car of the year, but Ford sold
just 19,085 in 2002, well short of the goal of 25,000 to 30,000 a year
announced when the retro convertible first went on sale.

The Thunderbird commanded $8,000 to $10,000 above its sticker price when
sales began, but will probably sell for $1,000 to $2,000 under Ford's
recommended price by spring, said Jesse Toprak, senior manager of pricing
and market analysis for Edmunds.com, which tracks the prices people pay for
vehicles, as opposed to the manufacturer's suggested retail price, or MSRP.

"We think there are going to be some discounts soon," Toprak said. "It may
stabilize around $1,500 under MSRP."

The MSRP for the base 2003 Thunderbird is $37,175, including a $605
destination charge.

Convertible sales are notoriously seasonal, cooling in winter and heating up
as the weather improves. However, the Thunderbird's weakening price is
unusual, Toprak said.

"Corvettes and BMW convertibles sell at MSRP for years," he said. "This is
only the Thunderbird's second year on the market, and you're already seeing
softening in price. Next year, I think you're going to see problems.

"Once you have price softness, the only thing you can do is put incentives
on the car or enhance the product."

The T-Bird was hampered by cooling-system problems that delayed the start of
sales in 2001. Unspecified problems reduced production last spring, a
shortage that led to anemic June sales of just 1,290 cars.

"It's not a hit," said Jeff Brodoski, senior auto analyst at automotive
research firm J.D. Power & Associates. "They've kept expectations low, at
25,000 a year, but they've only had two months where they even hit 2,000 in
sales. It's struggling now, and it still hasn't hit its second year."

Senior auto analyst Mike Wall of the auto-research firm IRN Inc. said it is
"too soon to call the Thunderbird a complete failure, but it's safe to say
it's not the halo vehicle Ford had hoped it would be. I don't see a big line
of buyers waiting to get the T-Bird like the" Hummer H2 or Dodge Viper used
to have.

It's very difficult for an automaker to predict demand for a pricey
specialty car like the Thunderbird, said Michael Robinet, vice president of
global forecasting for CSM Worldwide, which advises suppliers on the sales
prospects for cars and trucks.

"There's no doubt Ford would like customer enthusiasm to be higher than it
is," Robinet said. "I don't think Ford's going to throw in the towel,
though. The Thunderbird is an important halo car, but it's not likely to be
in Ford's lineup 10 years from now."

Ford will probably use specialty models to spice up Thunderbird sales. It is
already selling a coral-pink T-Bird like the one Halle Berry drove in the
most recent James Bond movie, and a more powerful model like the
supercharged Thunderbird concept car displayed at the recent Los Angeles
auto show is also likely.

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[K & P Garage]

inventories swelling, big deal

Sometimes history does tend to repeat itself. Not too much different than in 1957 when the little bird was last seen loitering at your local Ford dealer. This time Ford may have done it to themselves by putting a slight bit of overproduction on the end of the 2002 model year. Same as they did in the last half of 1957. For 2002, I have read that it was in the neighborhood of around 6000 cars. I do not know if this is accurate but it would account for the inventories mentioned.
It is really too bad that Ford chose to do that because they must have had some marketing study that told them that 25,000 was the number that would work well for 2002. No doubt greed on the part of some led to the overun of an otherwise good thing. I even stood there in Carlisle, PA in June of 2001 and listened to Nancy Goia (sp? sorry) state that they had almost the entire run of 25,000 spoken for. Ford did the same thing in 1957. Then as now it coincided with a downturn in the economy and T-birds sort of piled up on the dealer lots.
The so called experts quoted in the article may be correct in their facts to some extent however what they do not understand is the fact that cars like the T-Bird are not to be judged by such standards. Ford was stupid giving them any ammunition by making more than was studied and planned.
They are very incorrect in their statement that Corvettes and BMW convertibles sell for MSRP for years before dropping. Sounds to me like we might have a little bias in that reporting. All of the dealers here in Central Florida are advertising Corvettes at below MSRP even in their anniversary year. The local dealer has Z-4's stacked up like firewood. And, as for the H-2, they have not even been out a year and they too are below MSRP even with the free press from the fighting in Iraq.
When it is all said and done though, I don't think many people will complain about this little car's history repeating itself. So, if inventories are piling up by the ones and twos all over the country, rest easy, put the top down and enjoy the ride!!