Ford Offers 0% Loans Plus Gas Credit

DETROIT, May 31, 2006; Reuters reported that Ford Motor Co. said today that it would offer zero-percent financing on almost all of its vehicles and give buyers $1,000 toward gas purchases as part of its most aggressive sales incentive program of the year.

Ford said that as part of its "Drive on Us" discount program, which begins on Thursday and runs through July, customers would be given either a prepaid debit card for $1,000 of gas purchases or an equivalent discount on the vehicle purchase price.

Ford's offer to subsidize gas purchases for car buyers upped the ante for larger rival General Motors Corp., which offered a similar but more limited program earlier this month in Florida and California.

Both promotions take aim at U.S. consumer concern over high gasoline prices, a factor seen crimping sales of the large sport-utility vehicles and trucks that are the most profitable models offered by both companies.

Analysts closely track the sales incentives offered by auto makers because the amount of the discounting is read as an indication of how urgently the manufacturers need to move unsold inventory.

Ford sales fell almost 4 percent in the first four months of the year from a year earlier. Analysts expect that the No. 2 U.S. auto maker will post a sales decline of up to 11 percent when it reports results for May on Thursday.

Chrysler Group, a unit of DaimlerChrysler AG, has also spent heavily on sales incentives this year, including an offer of zero-percent financing in May.

GM's offer of employee pricing for any car buyer last year succeeded in boosting sales but touched off a price war that GM executives pledged to avoid this summer in order to protect margins and avoid volatile swings in sales volumes.