January 10, 2011 / 3:52 PM / 8 years ago

Ford sees pickups as harbinger for 2011 sales

DETROIT (Reuters) - A top Ford Motor Co executive said on Monday that the strength of pickup truck sales in the first quarter will be a key early signal for the overall 2011 U.S. auto market.

Ford Motor Company Executive Vice President Mark Fields accepts the North American Truck of the Year award for the Ford Explorer on the press day for the North American International Auto Show in Detroit, Michigan January 10, 2011. REUTERS/Mark Blinch

Global sales and marketing chief Jim Farley said that Ford for now is maintaining its annual sales forecast of between 12.5 million and 13.5 million, up from 11.5 million in 2010.

Speaking on the sidelines of the North American International Auto Show in Detroit, Farley declined to give a specific forecast for Ford sales, other than to say the automaker is just as optimistic about 2011 as it was in 2010 when its sales increased 19 percent. Last year was Ford’s largest year-on-year sales increase in its home market since 1984.

“We’ll look at pickup segmentation,” Farley said on the key to early signs of 2011 industry sales strength. “How strong is the pickup market in percentage of the market is important. Pickup trucks were around 12 percent of the industry (in 2010).”

Auto analysts say that pickup truck sales are likely to receive a boost in 2011 because new U.S. tax laws allow for businesses to get tax breaks on capital purchases for trucks like the Ford F-series. The F-series has long been the best-selling vehicle line in North America.

Farley said Ford was surprised by the strength of the commercial fleet market in 2010 and expects continued strength in this area which includes medium- and heavy-trucks in 2011.

Farley said part of the reason that commercial fleet sales were high is that businesses were replacing old vehicles.

In addition to pickup trucks, sales of the “C-segment” of small cars will be key, he said.

“If the C-segment is strong, obviously we’ll have to make some adjustment (to 2011’s sales forecast),” Farley said.

Small cars the size of the new Focus model make up the biggest auto segment in the world, and Farley said that the new Focus is a key to the automaker’s success in 2011.

“We have not had this kind of competitive C-segment car at Ford, a global car, in a long time,” Farley said.

About 28 percent of the U.S. market is in this small-car segment which includes Focus, and 33 percent is small SUVs built on car platforms, called crossovers, which include Ford’s new Explorer.

A full-sized crossover, the Explorer, was named 2011 North American Truck of the Year at the Detroit auto show on Monday.

Of the Explorer in the U.S. market, Farley said, “We just didn’t have this kind of vehicle in the past.”

Farley said he expects the Focus Electric, to be on the U.S. market by the end of 2011, to sell between 5,000 and 10,000 per year. Ford is planning for that production rate in the next few years, but Farley said it is too difficult to predict how sales may increase because it is not clear how infrastructure that supports electric cars will develop.

He expects sales to be much higher for plug-in hybrids. Ford will launch the crossover C-Max Energi plug-in hybrid electric vehicle and the C-Max Hybrid in 2012 in North America and in Europe in 2013.

“If electric vehicles are really going to capture the imagination of America, people are going to have to see them as a single-use vehicle,” Farley said, referring to a car that can serve as a household’s only vehicle. “Until that happens, it will be a specialty product.”

He said the success of the second-generation Toyota Motor Corp Prius hybrid-electric and the experience of customers that converted the Prius into a plug-in electric hybrid show that consumers need a remedy to “range anxiety.”

Farley, 48, was wooed from Toyota by Ford Chief Executive Alan Mulally to energize Ford’s sales force. Farley is credited with improving the automaker’s relations with its dealer network and increasing social media in its marketing.

All-electric cars like the upcoming Focus and the Nissan Leaf expect to have a range of about 100 miles on a full charge.

Hybrid-electric vehicles like the General Motors Co Chevy Volt offer essentially the same range as conventional gasoline-powered vehicles.

“Range anxiety is really a big thing for consumers,” said Farley. “Most plug-ins have a long enough electric range that it feels like an electric vehicle.”

Reporting by Bernie Woodall, editing by Matthew Lewis

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