Ford Poised to Take the #2 Spot Away from Toyota

Ford is making their move back into the spolight as the company is poised to retake over the #2 spot in U.S. auto sales from Toyota, for the first time since 2006. Although recent smears to Toyota's name have helped accelerate the process, smart moves from the U.S. auto maker has started this rise to the top in early 2009.

Ford is a smart company, I have said that many times to the hundreds of trainees that have taking my automotive sales classes over the last couple of years. The spotlight on their smarts really started to shine over the last year, while everyone else was in doom and gloom land. It started with bail out cash - remember if you will, both Chrysler and General Motors took government bail outs in 2009 to keep their companies afloat. Now whether you approve of that move or not, the "Governement Motors" moniker is a bit unfair, and I personally would not want to have been dealing with the economic situation around the country had they NOT taken the bail out. Be that as it may, Ford did not directly take any cash. I say directly, because of course bail out cash ended up helping the company, through their parts distributors and other layers of the company that were helped or saved by the bail out cash, but for everyone that only looks at the surface, Ford was clean. In a country where government assistance still equals terrorism, Ford's move made them the sweetheart of the domestics. Americans bought Fords on principle, which is not a bad place to be in. (Remember, mom, apple pie and Chevrolet? Same game, different decade).

The second area of the game that Ford was outshining other brands was up to and around Cash for Clunkers last year, and they were smart in two ways, maintaining inventories and with eligible vehicles. In the months up to Cash for Clunkers domestic factories were shut down for the most part. There was no need to build vehicles because there was a 120 days worth of inventory sitting in the shipping yards and yet every lot was full. And Chrysler was shuttering a number of their stores, and had inventory from those dealers with nothing to do with it. When rumors about Cash for Clunkers possible success started to be whispered at the water coolers, Ford didn't whisper, they started up their assembly lines. More product, preparedness. Smart. When every other lot ended up empty halfway through the program, Ford still had vehicles, and they have vehicles for September when all those folks that got the new car bug hadn't been satisfied during the C4C.

Ford was also very smart during Cash for Clunkers in a solution that had not just happened over night or in a few months, but they had been improving vehicle emissions on some of their most popular models like the Ford F150. So what did that mean during Cash for Clunkers? It meant that the #2 most traded in "clunker" was the Ford F150, but by ONE mile per gallon, it was eligible for the program and therefore the #4 most purchased new vehicle according to Edmunds. Although subtle, that piece of brand loyalty was not shared by any other brand on the Top 10 list of clunkers and replacements. Smart.

So how has all that smart played out in first quarter 2010? Ford said on Tuesday that they earned $2.1 billion, yes, billion with a b, in net profit in Q1, 2010. The automaker has cut costs to affect that net, but during the same quarter than Toyota and Honda were offering the highest incentives in history, Ford reduced incentive expenditures from $3,338 per vehicle to $3,221 sold. That means the average sticker price on Fords jumped $952 from last year and the transaction prices increased $1,294.

It is not all lollipops and snow cones though, as the number one worry that the company still has is how to lessen its current dept, although my feeling is that $2.1 billion can not really hurt in that area. I say keep an strong eye on Ford, they are a very smart company. Winning the #2 spot back for the first quarter does not a whole year make, however, the ongoing visibility of Toyota's safely challenges continue to help acclerate the process.

What do you think will keep or hurt Ford from continuing on its successful run?