In the month of November, Ford outpaced all other automakers in incentive dollars per vehicle; unfortunately, truck loads of cash incentives did not boost sales. Ford led the way over all manufacturers with $4,231 per vehicle in incentives, followed by Chrysler at $3,735 and GM at $3,011. Interestingly, Nissan was next at $2,236, with Honda and Toyota at $914 and $751 respectively. Now Ford is stepping up yet again with an additional $1000 bonus cash in addition to any existing rebates or interest rate deals on 19 of its Ford and Mercury vehicles, which now includes the popular Mustang coupe and Explorer SUV.
Ford states that inventory levels, at a 93-day supply, are "outstanding". That number compares to 90-days at GM and 76-days at DaimlerChrysler AG's Chrysler Group. Working to get production more in line with demand, Ford has reduced its inventory from 752,900 units in November of 2005 to the current 627,800.
One glaring concern is in the profit-critical truck market, where Ford's problems were most pronounced. Demand for Ford trucks was down 51 percent from a year ago, and incentive spending was up 51 percent In contrast, GM's incentive spending on trucks is down 13 percent for the same period, and sales were up 16 percent, mostly due to the introduction of the new GMT900 platform trucks. While the F-150 will still reign supreme in sales this year, its current year-to-date total of 725,459 units through November is 10.7 percent off last year's pace.
[Source: The Detroit News]
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Reader Comments (Page 1 of 1)
Brandon @ Dec 7th 2006 5:22PM
It's about time they offered the vehicles at a more reasonable price. Now maybe I'll actually have some customers this month. November was a horrid month for sales in New England
/Car salesman in Maine
TIM @ Dec 7th 2006 5:26PM
Ford is in trouble and may need help from a deep pocketed investor(S) they just leveraged their entire company and their stock is falling. They have pared back 10% and they're still discounting. To be profitable they need to get a lot smaller and fast. Some people have discussed killing Mercury and/or Lincoln. I still hope to get a 2008 mustang so I hope they pull it together.
Bill Maher is an Idiot @ Dec 7th 2006 6:49PM
Why not just lower the MSRP instead of cash back offers?
Sam Adams @ Dec 7th 2006 9:18PM
Ford has been lowering the MSRP... just look at the Price of the Fusion compared to its competitors.
GM has learned from guinea pig Ford... don't crank out a billion trucks and expect people to appear from Mars, and buy their trucks. Everyone has one already, stop building more!
Jon @ Dec 7th 2006 9:24PM
Because people are used to rebates. Its hard to ween people off of rebates once they are hook. Its like crack. Blame Lee Iaccoca.
BolderX @ Dec 7th 2006 10:17PM
And we still have to figure out if it's enough. Ford has little if anything I personally desire. After the post here on Autoblog about the Dealer incentives Daimler Chrysler began offering dealers this week on 2006 models I decided to start testing the Dealerships. If DC is in trouble with 06 models sitting on the lots the dealers are not doing anything to help the situation. I just got an offer of $99 OVER invoice on a 2006 Jeep Rubicon. A quick check on Edmunds shows the TMV at $1500 under invoice. These "incentives" are certainly not convincing me to break out my checkbook.
Howard @ Dec 7th 2006 10:20PM
In 10% tax land (Cali and NY perhaps others) the rebate is not a great incentive since the tax is paid on the sale price of the vehicle. $4,000 rebate means $400 extra taxes vs. $4,000 reduction in sales price.
Greg @ Dec 7th 2006 10:43PM
The automotive manufacturers need to lobby Congress to reinstate the tax deduction Americans used to have when they bought a new car.
Back in the late 80's... if you bought a new car, the sales tax you paid on the vehicle was tax deductable.
Andy @ Dec 7th 2006 11:51PM
If I could find a Fusion V-6 with AWD for $20,000, then I might be a buyer. I don't want an oversized pickup with a 14 mpg V-8.
Richard Warren @ Dec 8th 2006 8:49AM
#8 The interest also
JOHN @ Dec 8th 2006 12:20PM
if you lower the msrp and offer less cash back, you can't absorb negative equity with the bank if your financing. yet at the same time it causes those vehicles to depreciate at a faster pace, its a short term gain for sales and a long term nightmare for consumers who fall in that trap.
Mr. N. Disguise @ Dec 8th 2006 1:02PM
Has Ford thought about just cutting to the chase here and just hiring hookers?