Ford Ramps Up Incentives To Boost Sales

Ford ramps up deals again, Automaker extends $1,000 bonus cash to 12 more models, including Mustang and Focus
Sharon Terlep / The Detroit News, Dec 6

Ford Motor Co. offered the biggest incentives of any major U.S. carmaker in November, but that failed to translate into better sales.
Now, the Dearborn automaker is ratcheting up discounts again in a bid to end the year on a high note. On Tuesday, Ford added $1,000 in year-end bonus cash on 12 more models, including the Mustang coupe and Explorer SUV.
Ford is now offering the bonus cash on 19 Ford and Mercury models. Customers can use the bonus cash on top of existing rebates or interest-rate deals.
While Ford spent $4,231 on average to sell its cars and trucks in November -- a 50 percent increase from a year ago -- the month's sales were down 10.6 percent.
Ford ended November with a 93-day supply of unsold vehicles, compared to 90 days at General Motors Corp. and 76 days at DaimlerChrysler AG's Chrysler Group.
Ford acknowledges the sales slump, which pushed it into fourth place in the U.S. auto market last month. GM remains in first place, followed by Toyota Motor Corp. and DaimlerChrysler.
Despite the problems, Ford is happy with inventory levels that have been declining for months, company spokesman George Pipas said. Ford's inventory level, which dropped to 627,800 vehicles at the end of November from 752,900 at the end of November 2005, is a sign the company is having success bringing its production more in line with consumer demand, Pipas said.
"Admittedly, it's been painful," he said. "But from an inventory standpoint, our situation is outstanding."
Ford last month rolled out new incentives that included extending no-interest loans for 2006 models as well as some cashback and low-interest financing on 2007 models.
GM has moved to pare back heavy discounts, which can erode vehicle resale values, confuse consumers and cut into profits.
Ford's problems were most pronounced in the crucial truck segment. Demand for Ford trucks was down 51 percent from a year ago, despite a 51 percent increase in incentive spending. GM's incentive spending on trucks is down 13 percent for the same period, and sales were up 16 percent...read more: here

12/06/2006 11:31:00 AM

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