Ford hikes production

San Francisco— Ford Motor Co. is boosting production, and Chrysler Group LLC is putting more advertising and marketing muscle behind its revamped vehicles — more evidence of automakers' confidence in the industry's continuing comeback.
The moves were revealed Sunday at the National Automobile Dealers Association's annual convention here.
Ford said it will increase production for the U.S. market by 13 percent over what it had planned for the first three months of the year.

And in potentially good news for the jobs market, Dearborn-based Ford said it is studying adding shifts to keep up with rising demand.
Chrysler, meanwhile, told dealers it will ramp up its ad budget 68 percent this year, as it rolls out 16 new or significantly refreshed products in its efforts to boost global sales 25 percent, to 2 million this year. The first proof of that advertising commitment came with a two-minute ad during Sunday's Super Bowl.
Both steps indicate the automakers believe the industry revival has legs; more than 80 percent of Ford and Chrysler dealers are making money, and General Motors Co. says more than 90 percent of its dealers are in the black, up from 40 percent a year ago.
Ford said its first-quarter production will rise to 555,000 vehicles. It has a supply of fewer than 10 days of its newly designed 2011 Explorer, which is built at the Chicago Assembly plant and was named "Truck of the Year" at last month's North American International Auto Show in Detroit.
"You should expect continued increases as the year goes on," Ken Czubay, Ford's vice president of U.S. marketing, sales and services, told reporters on the sidelines of the dealer convention.
"We are running flat-out right now."
Czubay told the dealers "we're committed" to studying additional shifts, but "we're not going to oversupply."
Chrysler dealers, who had been starved for attractive products before this wave of 16 new and refreshed vehicles was unveiled, were pleased with the news that the ad budget would increase.
It comes on the heels of Chrysler's vow to spend $500 million over five years to help them improve showrooms.
"We have to launch these products and launch them well," said Fred Diaz, who heads Chrysler's Ram brand. "We can't just deliver products to market and not make the world aware that these great new products are hitting the showroom."
Longer wait
While Chrysler promised a 68 percent boost in its advertising budget, it wasn't immediately clear how that translated into dollars this year. According to Advertising Age magazine, Chrysler's ad budget in 2009 — the year it filed for bankruptcy — was $576 million.
The company is waiting until closer to their launches to show and advertise the new cars and trucks they are bringing to dealer showrooms.
"We don't promise futures anymore. We do the marketing and we do the advertising when we're ready to go to market," Diaz said. "We're a disciplined market."
Lonnie Cobb, a Chrysler dealer from Humboldt, Texas, said the post-bankruptcy automaker needed to boost spending on marketing.
"It's going to be a great year," said Cobb, who agrees with the marketing strategy.
"Don't start marketing a new product until we actually have it on the ground," Cobb said. "Otherwise we're wasting money."
Said Bill Kelly, a Pennsylvania dealer who owns two Chrysler stores: "They are going to do a much better job, which we definitely have to have. I think they realize they haven't arrived yet but they are on their way."
Jesse Toprak, a senior analyst at the automotive research firm, said dealers and automakers have good reason for optimism.
"The growth is being fueled by consumer demand," he said, and not just from more fleet sales or incentives.
"There's a lot of pent-up demand."
Dealers get incentives
Also Sunday, Ford told its dealers about new incentives.
The Dearborn-based automaker will give dealers $50 for every vehicle with Sync, and $75 for every vehicle with My Ford Touch, the automaker's onboard communication and information systems. The incentive is to help "them with technology delivery," Czubay said.
The allowance starts immediately and dealers will get details later this week. Dealers can use the money to hire "geek squads" or hold clinics for new buyers to learn how to use the technologies.
Ford is still working to fix its Lincoln brand. It confirmed Sunday that it wants to trim another 100 Lincoln dealers as it pares back its luxury brand network.
In October, published reports quoted dealers as saying Ford wanted to shrink its 500 dealers in 130 major markets to 325. Czubay said Sunday it had 434 Lincoln dealers in 130 major markets at the end of 2010, and confirmed the 325-dealer target in the major markets.
Ford is offering buyouts to Lincoln dealers.
"We're working with every dealer to help them evaluate their business plan. We're not forcing anyone out. This is strictly voluntary," Czubay said. "It's a tough personal decision that they have to make."
Most luxury brands in the United States have 250-300 dealers. Lincoln has 1,200 — and it has the oldest average buyer among luxury brands — older than 60.
Lincoln is introducing seven new or refreshed products over the next three years. Sales were down 21 percent for Lincoln in January, but its market share in the luxury market increased 5.6 percent.
Czubay said it's necessary to reduce the number of dealers to make its remaining Lincoln dealers more profitable.
The remaining dealerships are being required to meet higher standards, and the automaker will begin evaluating them in April.
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