GETTING IT RIGHT: Doug Walczak, limousine and livery manager for Ford's North American Fleet, Lease, and Remarketing Operations, sets the record straight about Lincoln Town Car production numbers.
BOTTOM LINE: Town Car sales related to limousine and livery uses are not imploding. Town Cars sold for retail are not tanking. The limousine and chauffeured transportation industry can rely on continued Town Car production and new models through at least 2010. Ford is not saying yet whether a hybrid or alternative energy version is in the works.
The Financial Post article compared May 2008 vs. 2007, and then Jan-May 2008 versus Jan-May 2007. What it failed to point out is that in 2007 Ford had to SANDWICH 12 months of anticipated Town Car production into five months because it was transitioning its Town Car production from Michigan to a plant in St. Thomas, Ontario. Of course, the ramped up numbers in 2007 would make any comparison to 2008 look like a freefall.
Think of it this way: It's no different than if you had collected all your paychecks for 2007 before May 31, and then resumed your 12-month pay schedule in 2008, and had someone look at your Jan-May earnings in 2008 vs. Jan-May 2007, and then hysterically claim you got a major pay cut.
What's more, Walczak says Ford forecast a decline in sales across all of its models in 2008 for three reasons: 1) Deliberate reductions in units built to boost resale values of those models in the used car and auction markets; 2) Expected declines in demand due to rising fuel prices and a slowing economy; 3) A continued macro-trend in the industry where such models as the Town Car, Crown Victoria, and Grand Marquis increasingly become more popular with fleet customers instead of individual retail customers.
Walczak says: "We have a strategy to improve the residual value of vehicles. We are right-sizing that number, so we’re able to control the supply and demand at the auctions, which helps raise the used value of those vehicles.
If you shrink the supply of vehicles going through, that helps raise the value of the used vehicle."
Overall, if present trends continue, Ford expects Town Car sales for limousine and livery customers to be down about 5-10% for 2008, as the company had forecast in late 2007, Walczak says.
While that's not good news, it's certainly not a disaster, and the Town Car is not being driven off a cliff.
"It's safe to say we have a long-term commitment to the industry in terms of limousine and livery," Walczak says. "We will continue to build and provide vehicle as we have in the past. When you look at what the industry requires, right now the Town Car is the vehicle of choice. It's built like a tank; it is the workhorse in the industry. When you look forward, and the technologies we’re bringing out, we’re looking for all kinds of opportunities. There is no one single silver bullet at this point."
-- posted by Martin Romjue
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