Ford To Extend Clearance Sale, GM Upgrades Truck Deals
Ford Motor Co. said Monday it would extend its 2007 model year clearance sale through Aug. 31 and General Motors Corp. said it will enhance deals on 2007 full-size pickup trucks through July 31 as both auto makers look to boost retail sales.
Ford is looking to increase the momentum on retail sales it saw in June, while GM is re-adjusting its incentives after posting a surprising 21% decline in June sales.
GM's incentive spending was down by an average of $700 a vehicle in June and the auto maker's sales manager said last week he was surprised at the level of June incentive spending by competitors, specifically Toyota Motor Corp.
GM will offer either up to $2,000 in cash or reduced financing rates, including 0% for 36 months, on its 2007 full-size pickup trucks in the north- central and northeast regions. Customers in the south-central, southeast and western regions can receive either $1,500 in cash or reduced financing, including 3.9% for 36 months.
On extended and crew cab versions of the Chevrolet Silverado and GMC Sierra, GM is offering either up to $2,000 in cash or reduced financing, including 0% for 36 months, in all regions. California customers can get 0% financing for 60 months.
In GM's deals, customers cannot stack cash with the reduced financing.
GM also is enhancing its lease pull-ahead deals with up to 6 months waived for current GMC Envoy, Chevrolet TrailBlazer, Buick Rainier, Chevrolet Equinox and Pontiac Torrent contracts if the customer buys or leases a 2007 model year TrailBlazer, Envoy or Rainier through GMAC.
For the past 18 months, GM has worked to lessen its reliance on incentives, such as discounts and low financing programs in order to boost its profitability and improve the resale value of its new vehicles.
But GM sales manager Paul Ballew said last week that the auto maker would evaluate its discounts on trucks after a down June and competitors "flailing away" on incentive spending. Toyota was offering 0% financing for 60 months or more than $3,000 in discounts on its new Tundra pickup truck.
Despite the adjustment, GM said it will stick to its incentive strategy and use targeted, tactical deals.
Ford's new deal, which originally was scheduled to end Monday, offers 0% financing for 36 months on all 2007 Ford, Lincoln and Mercury vehicles.
Buyers of 2007 Ford, Lincoln and Mercury trucks and SUVs also will receive an additional $2,007 in bonus cash. The bonus cash offer doesn't apply to the Ford Edge, Freestyle E-series vans or the Lincoln MKX.
The move comes as Ford reported an 8.1% decline in June U.S. sales from a year ago due to a decline in fleet sales, most notably to car rental companies.
Sales of trucks, its most profitable vehicles, were up 2.9% in June, though car sales were down 25%. Overall, retail sales for Ford, Lincoln and Mercury vehicles were up in June for the first time since October 2006.
"The model year clearance event has generate a lot of excitement and we're extending it to continue the momentum even further," said spokeswoman Lydia Cisaruk.
Stabilizing its retail market share is a key part of Ford's turnaround plan. Faced with heavy losses in North America, the auto maker has been idling plants and offering buyouts to thousands of workers.
In late trading Ford shares were unchanged from the Monday close of $9.08, down 3 cents, on volume of 53 million compared with average daily volume of 38.7 million.
Shares of GM were unchanged in late trading from Monday's close of $36.77, up 28 cents on volume of 15.3 million.
(C)Terry Kosdrosky, Dow Jones Newswires
