Jim Schroer, Ford Motor Co. vice president of global marketing, was interviewed at the show by Staff Reporter Mary Connelly.
Has the half-point cut in interest rates helped in the showroom?
It's too early to see.
Are you looking for another cut in rates?
Who can predict? Whether the Federal Reserve Board thinks we need one or two more cuts is yet to be determined.
How much steeper will vehicle incentives have to be to offset the slowing U.S. economy?
We're cautiously optimistic that we are not going to have to go a heck of a lot higher. The reason is twofold:
Even with a little softening, we still think 16 million to 16.5 million vehicles (including 400,000 heavy-duty trucks) is a pretty good number for U.S. sales next year. We enter this period stronger than we have ever been because our product line is more aspirational than ever.
In the past we were selling Escorts on price. This time we are marketing Focus, and Focus is probably the most aspirational small car going. We have gone to great lengths in the last several years to make our products aspirational.
What happens if your competition raises the bar on incentives?
If you are selling cars that aren't as aspirational and are more commodity-like, the only way you will move those products is to put $1,000 on the hood. If our products are aspirational, we don't have to put as much money on the hood as our competition.
What is the second factor that makes you optimistic you can hold the line on incentives?
The administration of our incentives used to be what I like to call carpet bombing. You drop 1,000 bombs and maybe 10 find their mark.
Saying, 'My competitors are $1,000 off, therefore we better be $1,000 off,' is carpet bombing. That is throwing a lot of bombs away. Maybe you needed $1,000 off in some places, but you didn't in others.
Now the bulk of the incentives are managed regionally by our field sales folks who are trained to be general managers of their geography. They work with the dealers to tailor the incentives in a particular situation.