The Chrysler And Ford Conflict
Stocks: (DCX)(F)(GM)
According to several media sources, the Chysler unit of DaimlerChrysler will begin offering significant discounts on its vehicles in the U.S. within a few weeks to cut its inventory. The model will be so-called "employee discounts" which means that consumers get the sale price that the Chrysler employees would receive.
In the car industry, like the airlines, rivals tend to match one another's prices to keep market share from being taken away.
But, the management over at Ford announced yesterday that it was on track to get it North American operations profitable again by 2008. The also introduced their 2007 models.
With Ford's market share in North America down to 17.6%, the move by Chrysler opens the debate about whether Ford and GM will have to give up share to Chrysler or match the discounts and cut their yield-per-vehicle. Neither option will help Ford reach its goal.
Ford's stock is barely above its 52-week low of $6.38 and well down from the high of the period at $11.19. The announcement affirming the goal for profitability did not move the stock.
Wall Street seems to have an issue with Ford's credibility.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com He does not own securities in any of the companies he writes about.
According to several media sources, the Chysler unit of DaimlerChrysler will begin offering significant discounts on its vehicles in the U.S. within a few weeks to cut its inventory. The model will be so-called "employee discounts" which means that consumers get the sale price that the Chrysler employees would receive.
In the car industry, like the airlines, rivals tend to match one another's prices to keep market share from being taken away.
But, the management over at Ford announced yesterday that it was on track to get it North American operations profitable again by 2008. The also introduced their 2007 models.
With Ford's market share in North America down to 17.6%, the move by Chrysler opens the debate about whether Ford and GM will have to give up share to Chrysler or match the discounts and cut their yield-per-vehicle. Neither option will help Ford reach its goal.
Ford's stock is barely above its 52-week low of $6.38 and well down from the high of the period at $11.19. The announcement affirming the goal for profitability did not move the stock.
Wall Street seems to have an issue with Ford's credibility.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com He does not own securities in any of the companies he writes about.
posted by douglas mcintyre at 12:39 PM
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