USA: After the slow April sales come the rebates

After slower-than-expected April sales, Ford has launched new incentives of $US1,000 plus no-interest financing on its sport utility vehicles and minivans.

bcusack May 7, 2004

After slower-than-expected April sales, Ford has launched new incentives of $US1,000 plus no-interest financing on its sport utility vehicles and minivans.

Associated Press (AP) said the programme is called “The Choice” and gives buyers alternative incentives on the vehicles.

Buyers of the Explorer, Excursion and Expedition SUVs and the Freestar minivan can get a $1,000 rebate plus no-interest financing and can choose the continuing incentive of a $3,000 rebate or a no-interest five-year loan plus can get an additional $1,000 rebate if they finance through Ford’s lending arm.

AP noted that Ford’s US vehicle sales fell an unexpected 4.6% in April from a year ago as an aging car line-up continued to hurt business. Ford car sales fell 8.8% from April 2003, while truck sales fell 2.4%.

Industrywide, the report added, sales rose 0.8% from April 2003 after some analysts had forecast an increase of up to 5%, based on the economic recovery and the tax-refund season, but high petrol prices and the lack of new incentives apparently slowed demand, they now reportedly say.

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According to Associated Press, citing the Detroit News, the average incentive at General Motors, Ford and Chrysler was $3,961 in April, down from $4,033 in March.

Vehicle inventories are above the desired 60-72 days at the domestic Big Three, auto analyst Rob Hinchcliffe of UBS told AP – Ford’s inventories were 91 days, GM’s 88 days and Chrysler’s 83 days.

“Bloated inventory requires either more sales or less production,” analyst Gary Lapidus of Goldman Sachs reportedly told the Detroit Free Press.

AP said GM’s Truckfest promotion offers a $1,000 rebate plus zero percent financing on loans of up to five years on 2004 GM trucks and also has rebates of up to $3,500.

Chrysler has a $1,000 loyalty bonus to returning customers who buy 2005 Chrysler 300 Series sedans, AP said, adding that the DaimlerChrysler units also has a $1,000 rebate to 2005 minivan buyers, plus $1,000 to those buying any 2005 Chrysler or Dodge model who finance the purchase through Chrysler.