Memo to GM: Ford won’t play the price war game
|Jamie LaReau covers Ford Motor Co. for Automotive News.|
General Motors Co. denies it’s igniting a price war by recently offering higher incentives and lease pull-ahead deals on many vehicles.
GM is right. It’s not stirring up a price war -- at least not with Ford Motor Co.
That’s because Ford won’t bite.
For two days this week reporters asked Ford executives how Ford will react to GM’s incentives. Ford’s consistent answer: It will hold incentives steady, match inventory to demand and not play the price war game -- even if that means losing market share.
“We have a plan. The foundation of our plan is building products people want and value,” said Ken Czubay, Ford’s vice president of U.S. marketing, sales and service. “If we can do that on a consistent basis year-in and year-out we can achieve our sustained goal of profitable growth.”
You see, Ford doesn’t want mere market share volume growth. It wants profits.
To get profits, Ford knows it must build products that it can sell to customers who won’t need big spiffs as an enticement to buy.
Granted, GM says it’s matching production to demand to avoid big blow-out sales.
But having covered GM for years, I can tell you that Ford’s logic would have been mind-boggling to GM earlier this decade. Then, GM vigorously chased meaningless market share with dollar after dollar of incentives.
GM chased that market share right into federal bankruptcy court in 2009.
Here’s hoping history doesn’t repeat itself.
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