Car deals getting sweeter
By John Porretto
Associated Press
DETROIT — Financing deals and cash rebates on new cars and trucks rose to record levels last month, and Ford Motor Co. became the latest automaker to sweeten its offers yesterday.
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Like its rival General Motors Corp. did last week, Ford has extended its offer of interest-free loans for up to five years on a variety of vehicles, including the Taurus, Explorer and some F-150 pickups.
Ford Motor Co. has extended some of its sales promotions until its 100th birthday on June 16.
Ford's new program includes a $750 military appreciation discount on most Ford vehicles for active duty and retired members of the U.S. armed forces. The company also will match downpayments of up to $1,000 on Windstar minivans.
Ford, the world's second-largest automaker behind GM, already had announced it was extending a $5-a-day-lease promotion for the Mustang and Ranger pickup until its 100th birthday June 16.
"With consumer confidence up sharply and the affordability equation intact, we expect a strong sales environment heading into the Ford centennial," Ford Division president Steve Lyons said.
Despite heavy incentives in April, Ford, GM and DaimlerChrysler AG's Chrysler Group all saw their sales decline compared with a robust month a year ago.
At the same time, Toyota Motor Sales USA followed up its best-ever first quarter with its seventh consecutive record-setting April. American Honda Motor Co., Hyundai Motor America and Porsche Cars North America Inc. also posted record sales for April.
Most analysts expect foreign automakers to continue gaining share this year from the Big Three as the transplants add new vehicles and production capacity in North America.
Nearly every automaker had some kind of incentive last month, contributing to a rise in the average industry outlay per vehicle to $2,508 from $2,207 in March, according to a research report yesterday from analyst Wendy Beale Needham of Credit Suisse First Boston.
The average Big Three outlay surged 13.8 percent to $3,310 a vehicle, topping CSFB's forecast of $3,200.
"Incentives could go even higher in May, with automakers extending the generous April deals," the CSFB report said. "May is generally one of the highest (and often the highest) volume months of the year, so it will be a bare-knuckle fight for every last sale."
GM was the top spender in April, offering an average of $3,402 per vehicle, even as its total sales fell 9 percent. The outlay was up 16.7 percent from March.
Chrysler spent an average of $3,282, up 8.3 percent from the previous month, while Ford's average outlay was $3,198, a 13 percent increase from March.
Asian brands increased incentives by 6.8 percent in April, offering an average of $1,139 a vehicle, up from $1,066 in March. European automakers increased the average outlay from $1,668 in March to $1,817 in April.
Chrysler said last week it was extending rebates ranging from $1,000 to $4,500 on most models until June 2. It also extended the 72-month loans it has on six models.
GM also extended much of its program through June 2. Interest-free loans for 60 months are available on most vehicles, but the Corvette and some luxury models have been excluded. GM's April offerings were more extensive than those it launched after the Sept. 11, 2001 terror attacks.
GM Chairman Rick Wagoner said Friday the automaker had no plans to back off its aggressive incentives, though he acknowledged the deals seem to be losing their effectiveness.
In trading yesterday the New York Stock Exchange, GM shares rose 49 cents close at $36.23, Ford was down 2 cents to $10.03 and Chrysler parent DaimlerChrysler shares rose 77 cents to $33.34.
