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The Spin man is smiling.....

From the Detroit Free Press:

GM truck launch a threat to Ford

Analyst: Models will hurt F-Series

March 17, 2006


Ford Motor Co. could watch sales of its profitable F-Series pickup truck fall as much as 5% after crosstown rival General Motors Corp. launches its new pickup trucks later this year, according to an automotive analyst who downgraded his outlook for the Dearborn-based automaker on Thursday.

"We expect GM to take notable share from Ford in the full-size pickup segment in 2006 and, particularly, in 2007," Himanshu Patel, an analyst for JP Morgan, wrote in a note to investors.

As a result, Patel cut his rating on Ford to underweight, which means he predicts it will underperform the market for the next six months to a year. That rating is widely viewed as a sell recommendation to investors, and the change is significant: Patel was the last auto analyst who recommended buying Ford shares.

Now, Patel is one of 12 analysts who recommend selling Ford shares, according to data from Bloomberg. Another eight are neutral on the stock.

Becky Sanch, a Ford spokeswoman, said the company is committed to its turnaround plan, which aims to make Ford profitable in North America by 2008.

"We always monitor the competition," she said. "We have plans to continue to lead the full-size pickup truck segment."

Despite JP Morgan's report, shares of Ford closed up 8 cents, or 1.0%, at $7.93 on the New York Stock Exchange.

Patel also slashed his outlook on Ford's future financial performance. He now expects Ford to earn 50 cents a share in 2006, down from a prior estimate of $1.15, and he clipped the 2007 estimate to 60 cents a share from $1.

Among the reasons for Patel's change in outlook is how severely he thinks GM's new pickup trucks will impact Ford F-Series sales.

Patel said GM or Ford typically lose 2 to 7 points of market share during the first year after the other launches a new truck.

For the first two months of the year, sales of the F-Series trucks are up 6.2%. But, compared to last year, consumers bought 3.8% fewer Chevrolet Silverado pickups and 6.6% fewer GMC Sierra pickups, as they prepared for the newer versions of those models to come to market. GM's new pickups are slated to hit showrooms sometime this summer.

As a result, GM captured 27% of the pickup truck segment through February, while Ford captured 29%.

It's difficult to overstate how important those F-Series sales are to Ford and its profits. Through February, F-Series sales represented 26% of Ford auto sales.
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