Despite Bad News, Explorer Sales Up
After one of the most punishing months in its history, the Ford Motor Co. had at least one glimmer of good news. The company has released figures Friday showing it sold more than 40,000 Ford Explorers in August.
As CBS News Correspondent Alexis Christoforous reports for CBS Marketwatch, the sales figures show that many people are unfazed by the recent revelations regarding faulty tires, product defects, and Congress' raised eyebrows over Ford's CEO's initial reluctance to face a congressional inquiry.
"It suggests to me that American families have great confidence in the Explorer product," said George Pipas, a Ford marketing analyst.
Last August, Ford sold a record 39,000 Explorers. Ford also had a strong fourth quarter last year. This June, the company hoped to drive August sales up to 42,000, but fell about 2 percent short. The Firestone tire recall may have sprung a slow leak in Ford’s profits.
Analyst Peter DeLorenzo of Autoextremist.com warns that it's too early to draw conclusions, especially concerning the staying power of the Explorer or its manufacturer.
As of Friday, Ford’s stock had dropped 13 percent since the recall announcement. And analysts say the company has lost $8 million.
"The SUV market has plateaued and Ford's difficulties may help accelerate that a bit," DeLorenzo said. "SUVs as a segment (of the market) are receding.”
Ford's troubles couldn't have come at a worse time for the company. Its dealers want a busy fall to clear this year's Explorers out of showrooms to make way for the SUV's first redesign in six years, a 2002 model due in January.
Overall, auto sales were down in August for the major U.S. automakers while several import automakers reported small gains. U.S. sales at General Motors Corp. were down 5 percent. Sales at Ford declined 4 percent. The Chrysler arm of DaimlerChrysler AG reported a gain of 2 percent, but mostly from sales of minivans and trucks via rebates of as much as $3,000.
The next phase of Ford's battle comes Wednesday when its CEO faces congressional scrutiny.
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