Ford, General Motors Execs Optimistic on Sales

By: Anthony Fontanelle

Executives at Ford Motor Co. and General Motors Corp. have intimated their confidence last Wednesday that the sales in the United States will pick up in the last half of this year as a federal boost and slashed interest rates improved shoppers' confidence.

"We're beginning to see, after six quarters of declines, the beginnings of some pent-up demand," General Motors North America President Troy Clarke said at the Chicago Auto Show media preview. "You could make a case that the second half of the year could be significantly better."

Many analysts in the industry anticipate for the worst sales in America in a decade, divulged BusinessWeek. But Ford and General Motors said that there are signs of hope.

Clarke said that the majority of mortgages with adjustable rates will change over in the first two quarters of the year, and consumers have been planning for that. Additionally, the government help could stimulate consumers' confidence without drilling a hole in their pocket.

Mark Fields, Ford Americas president, was also bullish. "We do see opportunity in the second half," Fields said, adding that interest rate cuts could also help stimulate sales.

"We're going to keep our dealers competitive, and a lot of it's going to depend on where the competition is," added the exec of the maker.

Mark LaNeve, General Motors vice president for North American sales and marketing, said that big cuts GM and Ford made to their rental-car sales in 2007 could help stimulate demand in 2008 since rental cars often replace new-car sales when they return to the general market. LaNeve said that the automakers alone have cut 350,000 cars from daily rental fleet sales in the last few years. He added that automakers were also much more disciplined in 2007 about the use of incentives, which tend to artificially pull sales ahead.

According to the auto Web site Edmunds.com, incentives averaged $2,366 per vehicle in the previous year. The figure is down by $42 from 2006.

"We really believe the industry's going to be OK this year," LaNeve said. "We've had a fairly weak car market for the better part of two years. Economic weakness is being experienced in other places right now. We've already been in it."

Clarke said that the Detroit automaker's incentive spending will likely be up in the first half of the year. "I think incentives are a very important tool for us to explore and use. It doesn't mean we fall off our incentive discipline," he concluded.

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