The shakeup in Ford Motor Company's (NYSE:F) senior leadership continues with new CEO Mark Fields at the helm, and as with a previous move at the company, this change could be a bigger deal than investors think. With John Felice retiring after 30 years as vice president of U.S. marketing, sales, and service, Ford is replacing him with Mark LaNeve, who is currently chief operating officer at Global Team Ford, the global advertising and marketing agency for the Dearborn automaker.
In an extremely loyal, competitive, and cyclical industry, even a tenth of a percent of market share is critical in the U.S. automotive industry. Mark LaNeve's promotion means Ford's strategy to gain market share in 2015 just got more aggressive, and that could be a big deal.
Who is Mark LaNeve?
LaNeve has almost three decades of global sales and marketing experience, and served in senior roles at General Motors and Volvo Cars, among others, according to Ford. He's also well known for his old-school and often aggressive approach to moving cars off dealership lots. In fact, he was largely responsible for rolling out a widely publicized blowout sales event at General Motors; you might remember it as the "GM Employee Discount for Everyone" bonanza.
"He's a hard hitter, he's competitive, and I think he'll want to move the numbers," said Jim Seavitt, owner of Village Ford dealership in Dearborn, Michigan, according to Automotive News. "We've got great product, but sometimes you've got to get market share -- you've got to go after it."
Since the Great Recession, though, automakers have largely learned their lesson in regard to using drastic incentives to move the needle on vehicle sales. However, a more aggressive approach will likely be a welcome strategy for many Ford investors who watched the automaker's market share in the critical U.S. market slip to a six-year low. In fact, as you can see below, Ford lost more market share than any other major automaker last year.
Now, it should be noted that this market share decline wasn't solely because of a faltering Ford sales strategy; in fact, much of it was due to other factors. If you consider the 90,000 units of F-150 production lost due to factory changeovers to enable production of the 2015 model, as well as the planned 15% reduction in sales to rental businesses, those two moves alone account for the slight decline in Ford sales this year.
That said, 2015 will be a critical year, as investors expect sales to move higher on the heels of a 2014 that rolled out many more vehicle launches than usual. In fact, Ford launched 16 vehicles in North America alone last year, which is more than three times the amount it rolled out in 2013, and more than twice what it will roll out this year.
With high-value vehicle launches, such as the 2015 Mustang and F-150, new foot traffic will be filtering through Ford dealerships this year. The folks at the Blue Oval expect 54% of sales this year to be generated by vehicles launched in 2014 or 2015, and the simple fact is that newer vehicle designs sell better. With a substantial amount of new vehicle launches, and LaNeve's typically more aggressive sales strategy, Ford's sales should be hitting overdrive by mid to late 2015.