The Wall Street Journal (free this week) reports that for the first time in 18 years, Chevy may sell more cars than Ford. Real Fords, not Lincolns or Mercs. Calendar year, not model year. A statistic of limited business value. Unit volume is loosely coupled (especially at Ford and GM) to profits and profits are what shareholders expect.
"Some dealers question whether the continual chase for market share makes sense. But some Ford dealers, stung in recent years by thinner profit margins, are among the most avid proponents of keeping the lead even if it means bigger discounts and a short-term hit in profitability. "I'd be willing to do whatever it takes to maintain leadership at this point in the year, especially because it hasn't been that stellar in 2005," said Jerry Reynolds, owner of Prestige Ford in Garland, Texas. He said market leadership remains one of the most talked about factors at dealer meetings."
Would Mr. Reynolds rather give away a boatload of Fords or sell a few very high margin Lexuses?
There's an old joke about selling below cost and making it up in volume. A car dealer can live with low margin new car sales by gaining a loyal service customer and making a few bucks (or a lot of bucks) on the trade-in. And don't forget the super magic silicone paint sealer. Maybe they'll bring back seat covers.