The Wall Street Journal-20080130-Ford to Challenge Chrysler Van
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Ford to Challenge Chrysler Van
Full Text (466 words)Ford Motor Co. plans to bring its European commercial van, known as Transit Connect, to the U.S., people familiar with the company's plans said.
Ford executives will announce the move at next week's Chicago Auto Show, these people said. Ford, looking to compete with Chrysler LLC's larger commercial van, the Dodge Sprinter, will aim for volumes of about 20,000 vehicles toward the end of 2009, one of these people said. Chrysler sold 16,586 Sprinters in the U.S. last year, according to Autodata Corp., off about 25% from a year earlier.
Ford plans to import the vans from its factory in Turkey, a person familiar with the matter said. Sales of Ford's Transit Connect vans rose 47% between 2003 and 2006 to 69,572 vehicles, according to the latest data from Global Insight, an economic-forecasting firm. Full 2007 results were expected to drop slightly but remain above 69,000.
It remained unclear whether Ford would devise a different name for the van when selling it in the U.S.
Large vans make up a small segment of total U.S. auto sales. Auto makers sold 325,744 of the vehicles last year, about 2% of all light- duty cars and trucks sold industry-wide.
Ford's decision to bring the vans to the U.S. underscores the company's increasing focus on leveraging global assets. One of Chief Executive Alan Mulally's main goals since taking the helm at Ford has been to get the auto maker to simplify its portfolio and sell vehicles world-wide as opposed to just for certain markets. Ford's first consumer-oriented global vehicle will be a subcompact known for now as "Verve," which the auto maker plans to sell in Europe and Asia later this year and in North America by early 2010.
A Ford spokeswoman said: "We don't comment on future-product speculation. Ford is committed to accelerating the delivery of more products people truly want and value, as well as leveraging our global assets."
Also, adding some volume of Transit Connect vans in the U.S. could increase capacity utilization for Ford at the Turkey plant, spreading fixed costs such as engineering over a higher number of vehicles, said David Cole, who heads the Center for Automotive Research in Ann Arbor, Mich. "It's a big deal to get that capacity utilization as high as you can," Mr. Cole said. "The closer you get to 100% utilization or beyond . . . you become profitable. The last car you make is more profitable than the first car you make."
Ford intends to market the vans as a solution for small-business people, such as caterers. Larger vans in the U.S. are often used by plumbers, electricians and for transporting people from hotels and airports. It is unclear how Ford intends to price the van, though the 2008 Dodge Sprinter cargo van sells for about $34,000.
