US:Ford ramps up deals again
Ford ramps up deals again
Automaker extends $1,000 bonus cash to 12 more models, including Mustang and Focus.
Sharon Terlep / The Detroit News
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 models Lincoln 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.
New truck offerings from GM helped boost its sales and added to the competition dogging Ford.
"Despite Ford's increased spending on cars and trucks, it did not generate demand," analyst John Murphy of Merrill Lynch said in a research note. Pipas said a downturn in the truck segment has hurt Ford more than other companies since that segment accounts for nearly one-third of the company's business.
The truck business has been hurting in the last year amid volatile gas prices and a slow housing market.
Toyota, for example, spent 25 percent more on truck incentives in November but 17 percent less on cars. Chrysler spent 8 percent more on trucks and 24 percent less on cars.
GM's truck discounts dropped 13 percent, though the automaker last year cut sticker prices by up to $2,000 on some of its most popular SUVs.
Industrywide incentive spending on trucks in November was $2,959 per vehicle, a 3.9 percent decrease from a year ago, and spending on cars was $1,673, up 15 percent.
Dealer George Gorno, of Gorno Ford in Woodhaven, thinks Ford's has strong vehicles but needs to do a better job with advertising.
The company's sweeping "Bold Moves" campaign places too little emphasis on specific products and features that will resonate with consumers, he said.
"I'm all for Bold Moves, but they need to portray the product more," Gorno said. "If people get into the showrooms and drive them, they'll buy the vehicles."
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.....