Ford President On His View Of The Car Market

NEW YORK Steve Gelsi writing for CBS Marketwatch submitted this story.

"In August sales along with the rest of the car industry, Ford division President Steve Lyons said he sees zero-percent financing continuing for the time being.

"This is the model the industry is going to run on," Lyons said at a breakfast meeting with reporters on Monday. "It's clearly a hot button with consumers, because it's a good deal."

Low interest rates, home financing, and the fact that zero-percent purchases can help people boost their credit ratings are all factors in the trend, he said.

Riding a zero-percent financing wave, August auto sales climbed 13.5 percent industrywide compared to the month before, to set a selling pace of 18.7 million vehicles this year in the U.S., far ahead of earlier forecasts of about 16 million.

Lyons said that the quick gait of auto sales could continue next year if the economy levels off or strengthens, and especially if interest rates stay low.

Last Friday, Ford said it would offer no-interest loans on seven 2003 models as it matched moves by General Motors Corp. (GM: news, chart, profile) and DaimlerChrysler (DCX: news, chart, profile).

Lyons said the zero-interest practice will be continue at the No. 2 carmaker, although it may be "used more sparingly" on brand new vehicles.

Despite the sales gains, Ford stock continues to be lackluster.

"We don't control the stock price," Lyons said. "If we do our job right and deliver products that sell right, that's all you can do."

On the product side, Ford's fortunes continue to lie with its light trucks like the Ford Explorer, which just saw a record month of sales in August. It's preparing the launch of a new version of its major moneymaker, the F-150 pickup truck, in time for its 100th anniversary celebration next June.

"I don't see the love affair with SUVs waning (among car buyers)," said Lyons, who pointed out that minivan owners have been switching over to models like the Ford Explorer.

Ford continues to shed market share on sedans, however.

"The challenge is on the car side," Lyons said. "We're gonna have to do more."

Ford will launch the upscale Five Hundred sedan and the SUV-like Crosstrainer, both to be built on a common platform with Volvo, which Ford acquired in 1999.

The automaker is currently in the midst of a debate over what to do over the mature Taurus nameplate, which was once the No. 1 selling car in the country. It may phase out the model, but in the meantime it'll continue to invest in marketing behind it.

It'll ramp up sales efforts behind is smaller Focus line of cars as a way to attract younger buyers to the brand.

The launch of the retro-styled Thunderbird has created excitement around the brand, but Ford only makes about 25,000 of them per year as a niche product. Halle Berry will drive one in the upcoming James Bond movie.

Other retro cars are in the works, including a new GT40 sports car and a more vintage-styled Mustang.