Filed under: Forecasts, Products and services, Launches, Consumer experience, Conventions and conferences, Ford Motor (F), Marketing and advertising
For residents of Detroit, this day might have felt like they were transported back to the great old West, as automakers Ford Motor (NYSE: F) and Chrysler brought country to Motown for this year’s North American International Auto Show.
For Ford, that meant recruiting the help of country music icon Toby Keith to unveil its newest model of the popular F-150 heavy duty truck. For Chrysler, it meant taking things to an even higher level. The auto maker literally brought traffic to a standstill when it paraded 120 Texas Longhorns into the convention center surrounding its newest version of the Dodge Ram pick up truck.
Definitely impressive marketing techniques to launch new models. Perhaps Ford and Chrysler figure they better put on a good show this year, after all, truck sales dropped pretty sharply last year, and with gasoline prices still hovering around $3 a gallon, you can bet that the trend will carry over into 2008.
Ford is banking on a successful showing for its F-150, which has been the best-selling automobile in America for the past 26 years, despite a 6 percent drop last year. High gasoline prices weren’t the only factor that pushed truck sales down last year. The troubling housing market also played its hand in the falling popularity of heavy trucks. As housing starts slowed, so did the need for home builders to add to their fleets. Like high gasoline prices which have carried over into 2008, the housing market weakness also continues to loom on consumers’ minds.
If last year’s 6 percent drop in large pickups was tough to swallow, 2008 could prove to be even more worrisome as some analysts are predicting even more dramatic declines. The director of United States automotive research at Global Insight in Lexington, Mass., Rebecca Lindland, predicts that 2008 could see as much as a 10 percent drop in the pickup market. Last year there were 2.2 million pickups sold in America, but Lindland thinks the number will shrink to around 2 million this year. That’s a pretty large hit, considering Lindland estimates truck makers profit between $5,000 and $10,000 per each truck sold.
The stakes are definitely big for both Chrysler and Ford. Both heavily rely on pickup sales, so a bad year could be disastrous. Hopefully for both companies, oil prices will stop their dizzying climb and the housing market will rebound, but for now neither of these appears to be in the cards. Whatever the year holds in store for truck sales, one thing is for sure… both companies definitely know how to put on a good show.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer
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