HispanicBusiness

Ford Motor Co. (NYSE:F), like all automakers, is hoping for a rebound in consumer confidence to jump-start sales that stalled after the federal Cash for Clunkers program ended.

Ken Czubay, a top Ford executive, said he expects a steady, not dramatic, turnaround in the months ahead.

"There will be continuing recovery," Czubay, Ford's vice president of U.S. marketing, sales and service, said in an interview last week. "It will be a flatter line of recovery. It will not be a hockey stick kind of recovery."

Automakers are adjusting to life after Cash for Clunkers, the wildly popular federal government program that gave incentives of up to $4,500 in late July and August that roused new-vehicle sales from a deep slumber.

Industry sales fell off last month after the program expired, and while full October results are awaited, Czubay said the industry figures appear to be weaker than pundits had expected.

Czubay, a 61-year-old auto industry veteran from Michigan, said he believes that two factors will brighten the sales picture: stronger consumer confidence and greater impact from the federal economic-stimulus money.

Many consumers need to feel more assured about their own job security, Czubay said, and he doesn't see availability of credit as an obstacle to purchases.

"Frankly, everyone's perception of the economy is very local," he said.

Ford's financial health has a local impact, both on the manufacturing and retail fronts.

Its stamping plant in Hamburg has about 800 employees, churning out parts for vehicles including the Ford Edge and Flex and the Lincoln MKX and MKT. The plant has close ties to an assembly operation just up the Queen Elizabeth Way in Oakville, Ont.

On the sales side, 16 Ford dealers belong to the Niagara Frontier Automobile Dealers Association, and the brand is routinely a top seller in Western New York.

Through September, local Ford sales were down by 17 percent from the same period a year ago, according to NFADA data. But in September alone, the sales total increased 6 percent from last year.

TrueCar, a car pricing Web site, estimates that U.S. vehicle sales in October will decline by 6 percent from a year ago. For all of 2009, it projects sales of 10.8 million, down from 13.2 million in 2008. But it forecasts an increase to 11.9 million in 2010.

TrueCar projects Ford's sales will fall 3.4 percent in October from a year ago, compared with a 1 percent gain for Honda and a 4 percent decline for GM.

Jeese Toprak, vice president of industry trends at TrueCar, said Ford has outperformed the other U.S. automakers this year. Ford might have benefited from customers favoring its products over GM's and Chrysler's because it didn't go through bankruptcy or take government loans, he said.

But Toprak said Ford also deserves credit for its product portfolio, which he called the "best they've ever had."

"They have some decent cars that can rival some of the imports," Toprak said.

The challenge facing U.S. automakers, including Ford, is persuading buyers of nondomestic brands to walk into a domestic dealership, he said.

Ford has improved its quality and reliability ratings, but those types of factors tend to not immediately affect sales, Toprak said. "It isn't going to happen overnight, but over time," as consumers share experiences with each other.

Czubay said Ford is about halfway through an aggressive product rollout that will continue through 2010. "This is a strategy that was conceived and funded three to four years ago."

Among the recent launches were the MKT, the new Taurus and a Fusion hybrid. Upcoming showroom arrivals include the Ford Fiesta, the new Super Duty truck, a new Focus, and a new Mercury small car.

Ford fared well in a Merrill Lynch study of how quickly automakers renew the products in their lineups, something that Merrill Lynch says plays a role in the automakers' market share and, ultimately, their profitability.

The report estimates that from 2010 to 2013, the average age of the models in Ford's lineup will be 2.4 years old, equal to Toyota's and better than the industry average of 2.6 years.

While Ford did not take government loans, it is seeking to amend its labor contract with the United Auto Workers after changes in the UAW contracts at General Motors and Chrysler. The UAW leadership has tentatively agreed to the changes, but they must be ratified by Ford's hourly workers.

While GM and Chrysler have made headlines this year for terminating franchise agreements, Ford a few years ago began encouraging dealership consolidation through a different approach, involving some local dealers buying out others.

Czubay addressed a question that has arisen during the dealer downsizing in the industry: How does an automaker benefit from reducing its number of sales outlets, especially when the dealers shoulder the cost of running those businesses?

If the dealers are dividing up only a certain amount of profitability, he said, it leaves them with less money to reinvest in their operations to stay competitive.

"A key part of our distribution channel is that our dealers have to make a good return on their investment," he said. "They have to make money."

Czubay credits Buffalo-area Ford dealers with being at the forefront of adjusting the size of the dealer force. And he says the area Ford dealers continue to be strong performers.

"Those guys, I'll stack them up against anybody," he said.

In the third quarter, Ford's national sales of Fords, Lincolns and Mercurys were up by 5 percent over a year ago. But its Pittsburgh region, which includes Buffalo, recorded a 19 percent increase, tops among all Ford regions, said John Schuldt, regional sales manager.

"The Ford, Mercury and Lincoln dealers in Western New York," he said, "certainly contributed to that increase."