US:Ford to push leases on Fusion,Explorer as way to entice customers to showrooms
Ford plans to push leases on Fusion, Explorer as way to entice customers to showrooms
MARK RECHTIN | Automotive News
LAS VEGAS -- Following a 25.2 percent swoon in October sales, Ford Division plans to push leasing as a way to entice consumers into the showroom.
Five years ago, leases accounted for more than 20 percent of Ford retail sales. Today, it's less than 10 percent, the company says.
Meanwhile, the industry still is around 17 percent, says Marty Collins, Ford Division general marketing manager. In the short term, Ford wants to get its leasing number "into the teens," he said in an interview here.
"We used to lease more than the industry. Now we have to claw our way back up," Collins says.
In November, Ford plans to promote lease deals on the Fusion, Explorer and Ranger. The Fusion's 24-month leases will require a 10 percent down payment, with $199 a month payment for a four-cylinder and $249 a month for a six-cylinder engine.
The Explorer will use a combination of 24- and 36-month leases, with a well-equipped version leasing for $299 a month. The Ranger will have a $999 down-payment and a $199 lease.
Ford can afford to get back into leasing thanks to improved residual values for vehicles such as the Fusion and Five Hundred, compared to the Taurus.
"Leasing a Taurus with a 35 percent residual amounted to a subvention that bordered on the unaffordable," Collins said.
A healthy residual, the projected value of a vehicle at the end of a three-year lease, is at least 45 percent of the sticker price. A low residual means that automakers have to provide incentive money to lower the monthly payment.
Ford has told its dealers to train their sales people on the finer points of lease negotiation. Collins said consumers often fail to grasp value pricing, in which dealers offer stickers without large incentives. But most consumers readily understand leasing in terms of monthly payments.
"Consumers are mindful of MSRP pricing, but there haven't been a lot of vehicles sold for MSRP over the past three years," Collins said in an interview at the SEMA show. "Consumers don't know what a $2,000 rebate means in terms of monthly payment."
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....