Filed under: Car Buying, Etc., Marketing/Advertising, Ford, Lincoln, Mercury
Ford incentives on the rise
Fresh off news that Ford Motor Company was raising prices by an average of $502 per vehicle, the Dearborn automaker told dealers that the company would significantly increase incentives. The goal is to keep older vehicles like the Mercury Milan and Ford F-150 moving off dealer lots while also appeasing a hurting dealer network. Ford plans on using marketing dollars to target specific regions of the US where a particular vehicle may be struggling. That may mean that in Chicago you can get $2,000 on the hood of a Milan, but in California incentives could reach $3,000. CNW Marketing Research President Art Spinella points out to The Detroit News that this selective spend approach is a lot like what new top marketing guy Jim Farley did successfully during his time at Toyota.
After looking at all the red arrows in January's "By the Numbers" report here at Autoblog, we're guessing Ford isn't the only company looking to bump incentives. How many times do Toyota, Honda, and Nissan all report down sales in the same month? At least Ford bumped prices first so the upcoming price battle could be mitigated somewhat.
[Source: The Detroit News]
_opt_thumbnail.jpg)
Reader Comments (Page 1 of 2)
Avinash machado 11:09AM (2/02/2008)
Incentives will only cheapen the value of the Ford brand. Plus it might imply to some that Ford has no confidence in its product.
Reply
almost Dr. G.. 11:24AM (2/02/2008)
the milan doesnt stand a chance against an equally priced new accord and that doesnt necessarily mean in quality, etc. it means they dont hold their value equally. it does imply that ford has no confidence in their product.
Reply
Talisman 11:35AM (2/02/2008)
The good thing is that a well equipped Milan is priced significantly below a comprable accord. I think Ford has plenty of confidence in their product but they realize much of the public doesnt recognize Fords recent strides in quality and reliability.
I dont particularly like Incentives either(except when im buying.lol) but they do need to do something to bring more people in to check out the new improved products. Selective incentives is at least a lot better than incentives straight across the board.
Reply
RamSport47 11:43AM (2/02/2008)
how about keep the prices in line, and not increase incentives...I mean, what's the point of raising prices when you need to raise incentives at the same time?
Reply
John 12:15PM (2/02/2008)
Ford is in serious trouble. Their products are so boring and bland. Sales are in a death spiral. The incentives won't help. Product, product, product! Ford doesn't get it. GM finally get's it. Chrysler may get it.
And what makes me laugh is all you see from Ford is advertising for the Microsoft SYNC system on their vehicles. How is that going to attract anyone? I recoil in horror at the thought of another Microsoft product in my life!
I hate to say but they are a couple of years away from being bankrupt.
Reply
Talisman 1:00PM (2/02/2008)
Ford is not in a death spiral. If you look closely you will see thay have actually been doing a LOT better as far as sales are concerned and quality/reliability of their products.
And there is plenty new product coming out. The new F-150 was just revealed, there is a new Fusion, Taurus, and Flex coming out this year along with a plethora of new engine choices including the awesome ECOboost selection coming next year.
There also at least 3 new Lincolns coming out between now and next year (refreshed MKZ, MKT, MKS) and sales of the MKZ and MKX are up.
Mercury isnt really doing better but its not currently hurting them. Im not sure what more you want from them. There is tons of high qulaity new product coming out very soon.
Seoultrain 3:03PM (2/02/2008)
I disagree with SYNC being bad. It's a $400 option that includes some features you find in few cars at any price. And for the first iteration, it's formidable.
But they are in trouble. Not as much as Chrysler though. And Talisman, the F150, Fusion, Taurus, Flex, or any Lincoln will not do anything. Their best (and only) hope is to get Ford Europe's cars over ASAP (Euro Mondeo, Focus, Fiesta, C-Max, etc). When (or if) that happens, it's only a matter of time before they change the public's perception and become successful.
And please kill Mercury. When you market to women, you've dug your grave.
Mallory 9:06PM (2/02/2008)
I don't think John said Sync was bad, he's just an anti-Microsoft holy warrior that would hate puppy dogs and lollipops if they were sold my MS.
Sync is universally praised and I would go pretty far out of my way to buy a Ford product just to get an awesome system like Sync in it. Unfortunately they make nothing that I could possibly stomach buying, cool Sync system or not. Ford of Europe? That's a different story, but whoever bought off on their US lineup should be dunking fry's in a South Bend Burger Chef right now. Just a heaping pile of booring, bland generocars.
Ligor 12:20PM (2/02/2008)
well they just don't get it, not only will this point to how Ford has no confidence in their own product, but they still have nothing interesting up their sleeve yet to get themselves out of trouble
i hope they just been hiding it very well
Reply
Talisman 1:03PM (2/02/2008)
Read my reply post right above yours. There is a ton of "interesting" product coming out of Ford(that they are not hiding) including some things they havent announced but have been leaked, like a brand new Ranger.
Rene Curry 12:20PM (2/02/2008)
Ford needs to "get bold" and try to create a new business model. You MUST do something different than the competition in this commodity sales market. Since I am told they cannot eliminate dealers due to franchise laws, try this....
End ALL marketing & advertising except for a skunkworks internet team & dealer support team. Take all that remaining savings and split it three ways.
1) Lower the car price with 1/3 of the amount.
2) Give dealers 1/3 for their own advertising & marketing campaigns at the local level. They must prove the expenses for reimbursement.
3) Move 1/3 to both product development & the bottom line.
Reply
Greek Boy 12:20PM (2/02/2008)
Everyone offers incentives, especially on outgoing models. Why this is news I have no idea. Ford has been lowering incentives on average, and now wants to maintain certain volumes.
Nothing to diss here, but many will try.
Reply
almost Dr. G.. 12:26PM (2/02/2008)
ok youre right talisman.. it is a couple grand cheaper than an accord.. i went and built one.. but no matter what, that plunge of -26.2% as per a couple posts ago is just nasty.. ford needed to do something quick and this is it..
Reply
Dan 12:39PM (2/02/2008)
If I see a regional incentive of $2000 where I live and $3000 two states over, my reaction as a potential buyer is that I'm being overcharged $1000 and they must not want my business.
Reply
Robert 12:40PM (2/02/2008)
So, I just finished listening to the January sales call. Ford IS NOT bumping up incentives drastically.
They are deploying an incentive program that gives certain vehicles in certain regions extra incentives and marketing dollars. So, yes, in California, the Milan's incentives might be up and there may be more ads, but that doesn't mean the Milan's incentives in Michigan or Texas will go up. From the sound of it, incentive spending might increase slightly over January, but it won't be drasitc and it probably won't match year-ago levels. Ford's incentives were down significantly in January YOY - about $600 per vehicle if I interpreted Farley's comments correctly.
Of note, the Ranger's 19% bump in January was attributed to some test marketing in some regions being run similar to what they are deploying to select vehicles and regions across the nation.
This is exactly how Toyota runs their incentive program, and I would expect incentive spending to continue its decline and be more targeted at Ford throughout the year.
Reply
Biff 1:24PM (2/02/2008)
Spare me.
Toyota is putting $5000 on the hood of every Tundra? And that is supposed to represent "brilliant campaign marketing?
Again, spare me.
Fords sales dipped 4%, but guess what? Their sales to renters was down over 5% from same period.
Reply
tekdemon 11:39AM (2/03/2008)
Where in the world does Toyota have $5000 in incentives on the Tundra? There's a $2000 rebate on the hood, and that's about it. That's exactly how much GM has on the hood of their pickups too.
Ford F-series sales went down 8.4% for January, so it's not like Ford's going to be able to avoid playing the incentive game for long.
John 1:27PM (2/02/2008)
Ford is definately not doing a lot better in sales. Look at Ford's sales trend over a long period of time like 10 years and not just a few new heavily discounted models. Yes, death sprial.
And I never said the quality was bad. Their styling is the big problem. It's terrible even compared to their domestic competitors. GM is totally kicking their butt with vehicles like the Malibu and CTS stylewise. Ford's designs are so boring nobody wants them. Look at the new Taurus (or 500 or whatever it's called). It's makes me yawn just looking at it.
You can get a quality vehicle anywhere these days. Heck, even from a Hyundai. Look at the JD Power numbers.
Until Ford makes products people are excited about, and not just Mustangs, I see nothing but bankrupty court in their future.
Reply
Talisman 2:24PM (2/02/2008)
Since Mulally has taken over, there situation has been steadily improving. Yes looking at the past 10 years as a whole is depressing. Im talkign about the recent past and the present. I personally dont see anything wrong with the styling minus maybe like the Focus and the Navigator. Looks are subjective though. I think everyone will be pleasently surprised how 2008 turns out for Ford. Ive been really studying their moves lately and I look forward to seeing everything thats coming.
P.S. Even though I like Ford, Lincoln, Mercury, im personally not even a fan of the Mustang. lol. I cant wait until Ford comes out with more sophisticated enthusiasts offering like an Ecoboost AWD MKZ(which is coming). When that car hits, im purchasing one.
WowNasty 2:14PM (2/02/2008)
Come on people lets not forget the EDGE, it was a sales success a long with the MKX, they sold over 130,000 EDGE's in 2007, and nearly 40,000 MKX's.
Ford is on the rise, and with the new must have infotainment system called SYNC, Ford is going to be back in the number two spot in a few years.
Reply