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July 9, 2008

Glut of '08s postpones battle between new F-150s, Rams

When Chrysler LLC and Ford Motor Co. rolled out their redesigned 2009 pickups in January, the two domestic automakers set up what promised to be a titanic battle this fall for market share.

But now it seems that this year's sales prize fight between the Ford F-150 and the Dodge Ram has been postponed because of the cost of gasoline.

Ford announced last month that it was delaying the public introduction of the F-150 - until this year the most popular vehicle in North America - by at least two months, until late fall.

And on Monday, Chrysler announced that it was shutting down, through at least Aug. 1, a Mexican assembly plant that produces the Ram.

The problem is not that the two domestic automakers aren't enthusiastic about their 2009-model pickups - they spent millions filling them with new gadgetry - it's that they have so many unsold 2008s.

According to trade publication Automotive News, the automakers have a 142-day supply of their 2008 pickups in dealer inventories, more than double what they'd like to have. Ford has an estimated 226,000 F-150s on hand; Chrysler an estimated 103,600 Dodge Rams.

"It's not a good situation," said Aaron Bragman, an automotive analyst with Global Insight in suburban Detroit. "Eventually, they'll sell down the stocks of these trucks [using increased incentives]."

The situation could be worse for Chrysler and Ford, he said. "Actually, this is the best kind of market to have a brand-new pickup to introduce, because it can create buzz and at least attract people into the showroom."

Yesterday, Ford announced big new incentives on F-150s. With financing specials, rebates, and employee pricing, the automaker is offering in excess of $7,500 on some models.

"I'm looking right now at a loaded [F-150] Supercab that lists for $35,455, and I can sell it now for $22,729," said Les Mc-

Donald, sales manager at Steve Rogers Ford in Waterville. "How do you sell '08s? That's how you sell '08s."

Chrysler, too, is using large incentives to get 2008 Rams off its lots. In addition to extending its $2.99 gas guarantee through the end of the month, Chrysler is offering rebates and incentives on 2008 Rams in excess of $9,000, depending on the circumstances and location.

It is offering zero percent financing for 72 months plus $4,000 in bonus cash, or $10,000 off in rebates and bonuses on the Ram Quad Cab and Mega Cab.

Sales of the Dodge Ram have fallen 48 percent through June, and F-150 sales have dropped 23 percent. Sales of General Motors Corp.'s pickups, like the Chevrolet Silverado that was redesigned last year, fell 26 percent during the first half of the year.

Ralph Mahalak, Jr., owner of the Monroe Dodge Superstore in Monroe, Mich., expects to begin receiving the new Ram by mid-August.

"We're very excited about the new 2009 model, and getting showroom traffic in on the new model will give us the opportunity to talk to the new truck buyers, whether they buy the '09 or the '08," Mr. Mahalak said. "You're going to have certain customers that are going to want the latest and greatest technology, and others that want the best deal, and we need them both."

Mr. McDonald, at the Waterville dealership, said that although truck sales have slowed considerably as gas prices climbed, a segment of the population wants pickups.

"We're not selling trucks as fast as four-cylinder [small cars], but farmers and construction workers still need pickups, and we're still selling them," he said. -- Glut of '08s postpones battle between new F-150s, Rams
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