Ford Motor Co said on Monday it expects to gain U.S. market share in June as its sales would hold up much better than the rest of the industry and signaled its increasing confidence by raising production.
Ford said it would increase North American production in the third quarter by about 5.4 percent from a plan disclosed in early June amid signs that demand has begun to stabilize.
That plan had set Ford's first year-over-year quarterly production increase in North American in two years.
The underlying economic indicators, meaning fewer jobless claims, another month of somewhat higher levels of consumer confidence, suggest to us that the worst is behind us in terms of not only the economy ... but also that we may have seen the low point of auto sales, Ford U.S. sales analyst George Pipas told reporters in a discussion at Ford headquarters.
Ford expects its U.S. sales to be down 10 percent to 20 percent in June from a year earlier, while the industry overall could post declines of 25 percent to 30 percent, Pipas said.
Pipas said the U.S. could see economic growth in the second half of 2009 and higher levels of auto sales than the light vehicle sales rates we have been seeing.
We think it is a good bet now that is going to happen, Pipas said.
Ford, the only U.S. automaker to have avoided bankruptcy, has forecast a second-half U.S. recovery in demand. Ford posted a company record $14.7 billion net loss in 2008 and expects to return to profitability in 2011.
The U.S. auto industry could post sales declines of 25 percent to 30 percent in June from a year earlier, the smallest percentage decline since September 2008 when the U.S. sustained a financial market meltdown, Pipas said.
With Ford sales expected to decline by 10 percent to 20 percent, the company expects its share of the U.S. market in June to be comparable to May, when it posted its best overall share in three years and up from a year ago.
From a market share standpoint, it looks like another solid month, he said. I think it's a sure bet that our market share, both total market share and retail market share, will be stronger than it was in June of last year.
Ford, whose rivals General Motors Corp and Chrysler slashed North American production as they were preparing and going through bankruptcy, has been slowly increasing output.
Chief Executive Alan Mulally told Reuters in an interview last week that Ford would be poised to increase production as sales steady and the automaker increases market share.
The automaker said on Monday that it would increase its third quarter production plan to 485,000 vehicles in North America, about 5.4 percent above its previous schedule, by building an additional 15,000 cars and 10,000 trucks.
The increase is really in response to where we are seeing some demand for new products and share gains, Ford spokesman Mark Truby said.
The total represents a 16 percent increase from the 418,000 vehicles Ford built in the third quarter of 2008. It is spread among the lineup and includes some Focuses, crossovers, pickup trucks and Mustangs, Ford said.
U.S. auto sales plunged to their lowest monthly levels since the early 1980s from late 2008 through the first few months of this year. The industry posted U.S. sales of 13.2 million vehicles last year.
Through the first half of this year, sales have been running at about 9.5 million to 9.6 million rate, Pipas said.
U.S. auto sales could reach 10 million units on an annualized basis in June, though that is not a sure thing, Pipas said. A key variable would be the amount of fleet sales for the month.
It's hard to believe that 10 million (units) would be a psychological hurdle after what we experienced earlier this decade and I think that is possible, Pipas said.
Ford shares rose 17 cents, or 3.03 percent, to $5.78 Monday on the New York Stock Exchange.
(Reporting by David Bailey; editing by Andre Grenon and Carol Bishopric)