Ford Forums banner

USA:Ford under pressure to match rivals' lower minivan prices

1K views 0 replies 1 participant last post by  Stacy94PGT 
#1 ·
Ford under pressure to match rivals' lower minivan prices

By AMY WILSON | Automotive News

DETROIT - Ford Motor Co. may cut prices on its Ford Freestar and Mercury Monterey minivans, even though they were introduced just last fall.

Prices of key competitors' minivans have dropped, forcing Ford to consider following suit. Toyota started the price cutting when it introduced its redesigned Sienna last spring at a base price nearly $1,000 lower than its previous version. Then in February, the Chrysler group cut prices on its re-engineered minivans by an average of $3,000.

Dodge can undercut the $24,600 base price of the Freestar by $5,605.

"We're going to have to do something," said Ben Poore, Ford Division's car marketing manager. "The (sticker prices) in the market have changed fundamentally. We're not going to sit back and say, 'Oh, well, let's just accept our position.' "

During the first four months of 2004, Ford Division's U.S. minivan sales, which included some leftover Windstars, plummeted 19.4 percent from a year ago to 37,059.

Last week, Ford idled its Oakville, Ontario, minivan plant for the third week this year to reduce inventories. Stocks were as high as a 432-day supply for the Monterey on Feb. 1. By May 1, that dropped to 227 days for the Monterey and 97 days for the Freestar. Sixty days is considered normal.

Ford officials wouldn't say when to expect a price cut, but one likely time would be when the next model year starts in the fall.

The automaker has battled the competition by offering hefty rebates. Ford Division's total minivan incentives, including rebates, cut-rate financing and others, averaged $4,549 per vehicle in March, the last month for which data is available, according to Edmunds.com. Monterey incentives averaged $3,990 in March, down from nearly $5,000 in February.

Although U.S. sales of minivans rose 5.7 percent through the first four months of 2004, most of the credit goes to the Toyota Sienna. Sales dropped significantly for other major minivan competitors.

U.S. sales for the Sienna jumped by 135.7 percent in that period to 56,348 units. Toyota introduced the redesigned Sienna nearly a year ago with a $950 cut in its base sticker price.

It's too early to judge the success of the Chrysler group's new minivan pricing strategy, though its minivan sales improved slightly in April.

The re-engineered Chrysler and Dodge minivans went on sale in March. In addition to lowering prices by an average of $3,000, many models adopted fold-flat seats for the second and third rows of seats. The Chrysler group also is offering a $1,000 cash rebate on the 2005 minivans.

Ford is offering $4,000 in rebates with regular financing on the Freestar or $2,000 off with 0 percent financing.

The Chrysler group's entry minivan, the Dodge Caravan SE, is priced at $18,995, including destination. The Ford Freestar starts at $24,600, including destination. But the two base models aren't directly comparable because the Caravan has a shorter wheelbase than the Freestar. The base price of the Dodge Grand Caravan is $21,995, including destination.

Ford and Lincoln-Mercury dealers would welcome lower sticker prices.

Dealers are struggling to convince consumers that the Ford minivans are new.

The exterior styling of the Freestar and Monterey strongly resembles the 2003 Windstar minivan.

The lack of visual distinction, combined with sticker prices that creep into the upper $30,000 range, is challenging.

"It's one thing to have the cars, and obviously it's important to have the quality. But it's not at any price," said Jack Straub, dealer principal of Straub Lincoln-Mercury in Keyport, N.J.

"When you start hitting $35,000, the consumer starts to think luxury. And it's not a luxury product."
 
See less See more
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top