Ford Matches Incentives on New Cars, Trucks, Following Lead of GM, Chrysler

DETROIT June 5, 2003; John Porretto writing for AP reported that Ford Motor Co. announced its latest round of incentives on new cars and trucks Thursday, following the lead of rivals General Motors Corp. and DaimlerChrysler AG's Chrysler Group as the three battle in an intense pricing war.

But the competition to lure consumers is taking a toll on profits, and Chrysler said this week incentives are a major reason the automaker will likely post a $1.2 billion operating loss for the April-June period.

Ford's latest program is much the same as its previous one, which expired Wednesday. The world's No. 2 automaker is offering interest-free loans for up to five years on a variety of vehicles, including the Taurus, Explorer and some F-150 pickups.

Ford is offering $2,500 cash back on the Taurus and $3,000 cash back on other vehicles eligible for interest-free loans, spokesman Jim Cain said. The company also will match downpayments of up to $1,000 on the Taurus.

The offers are available through July 9.

Ford will continue to offer its $5-a-day-lease promotion for the Mustang and Ranger pickup until its 100th birthday June 16.

GM, the world's largest automaker, and No. 5 Chrysler also are continuing heavy incentives this month that include interest-free loans for most vehicles and cash-back offers of up to $4,000 at GM and $4,500 at Chrysler.

Because of above-normal vehicle inventories and sluggish sales, analysts and industry executives say they don't expect the discounts to go away anytime soon.

Some observers of late have questioned the effectiveness of the deals. Despite heavy incentives in May, GM was the only one of Detroit's Big Three automakers to post a sales gain. The month before, all three recorded sales slides compared with April 2002.

So far this year, Chrysler's car and light truck sales are off 6.3 percent, GM is off 6.1 percent and Ford is down 3 percent.

Earlier this week at GM's annual shareholder meeting in Delaware, GM chairman and chief executive Rick Wagoner said he was somewhat encouraged about prospects for the remainder of the year given such factors as the new federal tax package, low interest rates and improving exchange rates.

"We think things could begin to pick up, but I'd have to say we've been waiting for a while," Wagoner said.

In afternoon trading Thursday on the New York Stock Exchange, Ford shares were down 7 cents to $10.49, GM shares were down 27 cents to $35.58 and DaimlerChrysler's U.S. shares were off 12 cents to $30.63.

DaimlerChrysler AG, http://www.daimlerchrysler.com

Ford Motor Co., http://www.ford.com

General Motors Corp., http://www.gm.com