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Old 01-24-2003, 06:51   #1 (permalink)
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Ford hikes prices for fifth time on '03 models in effort to offset incentives

By JOHN K. TEAHEN JR. | Automotive News

DETROIT -- In its effort to recoup some of the profit-destroying cost of retail and leasing incentives, Ford Motor Co. has posted its fifth increase of the 2003 model year. One of the increases was a partial, applying to only a few models.

An Automotive News analysis finds that the latest increase averaged $188 when sales-weighted across the spectrum of the company's cars and light trucks.

Although the figure is substantial for a mid-model-year increase, it hardly makes a dent in Ford's crushing incentive burden. In December, Automotive News reported that Ford's incentive load was $3,516 per car and truck sold in the United States. The figure is from CNW Marketing/Research of Bandon, Ore.

Since mid-December, Ford's incentive costs have increased as the company attempted to match the brutal barrages unleashed by General Motors.

Ford's latest price hike fell mainly on the shoulders of Ford Division, which is fitting because Ford-badged models account for 89 percent of the company's sales. Automotive News pegged the division's average boost at $199, of which $175 was applied to trucks. That, too, is fitting. Light trucks make up 71 percent of Ford Division sales. The study put Lincoln's average increase at $95 and Mercury's at $89. Mixing them together in the sales-weighting process resulted in an average hike of $188 for Ford Motor.

Ford's F-series pickups, the world's best-selling line of vehicles, went up $150 to $450. The Ford Explorer, the best-selling sport-utility, rose $80 to $450.

As a point of reference, the current rebates are $1,500 to $2,000 on those lines, and the financing rate is 0 percent for 36 months.

Some of the Ford increase resulted from hikes in the freight fee - destination charge in factory parlance. The company upped the ante on six of its 11 car lines and nine of its 11 truck lines.

The biggest bumps were on the Ford F series and Expedition. It costs the dealer $55 more in transportation expense to put those vehicles on his lot, and it costs the customer $55 more to drive them off the lot. The freight charge now is $795.
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