DETROIT -- Profits continue to decline for Ford, Lincoln and Mercury dealers in 2006, Ford Motor Co.'s U.S. sales chief says.
Average dealer profits are down 8 to 10 percent through April compared with the same period of 2005, said Cisco Codina, Ford's group vice president of North America marketing, sales and service. That was the most recent period for which he had data.
The period continues a long slide in profitability for Ford, Lincoln and Mercury dealers. Although new products and the summer clearance season give dealers a chance to improve their numbers, the average profit performance isn't likely to improve much for the rest of the year, Codina said.
"I'm still hopeful that we can turn that around," he said. "But I want to be realistic, as well, with business conditions."
The biggest challenge to achieving a turnaround is improving retail sales, Codina said.
Retail sales for the Ford, Lincoln and Mercury brands are down 9 percent through the first six months of 2006. Overall sales are down 3.9 percent for the same period. That's a flip-flop of Ford's objective this year. Improving retail sales has long been the priority, executives say.
The Ford Shelby GT500, which went on sale in June, is one new product that will give dealers a chance to make some money. The 500-hp Mustang is almost sold out, Codina said. It is commanding full price -- even premiums, in some cases -- for the dealers.
But planned volume is low, at around 9,000 units.
New crossovers such as the Ford Edge and Lincoln MKX also will help. But because they won't arrive in dealerships until November, their potential to lift profits this year is limited.
Codina said Ford Motor dealers have responded to the difficult profit environment by doing more to control their costs and improving the performance of service and parts operations.
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