Burdened with an inventory glut, Ford Motor Co. is discounting the 1995 Ford Windstar minivan for the first time.

Ford is subsidizing Windstar leases in several major markets.

Ford is preparing for an all out assault on minivan kingpin Chrysler Corp. early in 1995. Chrysler minivans may be in short supply as the company gets ready to introduce a new model next spring. A Windstar incentive could go national in January.

Current Windstar programs include:

In California, Windstar customers are handed $750 cash back on a 24-month lease.

Customers in five Southwest states get $950 cash when they opt for the Windstar Red Carpet Option Program - 24 months of payments with a final balloon payment that can be paid off or refinanced.

Dealers in the Boston, New York and Philadelphia regions are advertising the Windstar at a monthly lease rate of $298 for 24 months. Ford is discounting the lease interest rate and giving dealers $250 in cash to boost sales. A similar program is under way in Ohio.

The regional programs - which run through early January - are a likely precursor to a national Windstar lease discount, dealers say.

National Windstar subsidies may begin in January supported by a strong advertising campaign, say dealers whose Windstar inventories have grown from a 54-day supply on Aug. 1 to an 89-day supply on Dec. 1.

'The inventory is too great,' said the general manager of a Ford dealership. 'They are doing a Windstar program instead of throttling back on production.'

In March 1994, Windstar entered the sales arena as the first serious competitor to Chrysler's decade-long minivan dominance in the United States. General Motors' attempt in 1989 to field a high-volume minivan aborted - leaving Chrysler the undisputed minivan leader.

For the first 11 months of this year, Chrysler's four minivans - the Plymouth Voyager, Dodge Caravan, Dodge Caravan C/V and Chrysler Town & Country - guarded a 42 percent share of the U.S. minivan market.

Through November, the Windstar represented 9.4 percent of 1994 U.S. minivan sales. Ford built an estimated 212,055 Windstars through Dec. 22, but sold only 109,292 through November. Subsidies are now needed to clear dealer lots.

Ford also hopes its sales push gains clout because of timing.

In early 1995, Chrysler begins a minivan model changeover. Chrysler expects to lose 40,000 to 50,000 units of minivan production in calendar 1995, a spokesman said. That would be 6 to 8 percent of 1994 production.

Chrysler dealers are scheduled to begin receiving the new minivan next spring. 'Ford sees a window of opportunity because of Chrysler's lack of product,' said a Midwest Ford dealer.

Chrysler is trying to build minivan stock by extending production of 1995 models.

Chrysler now offers only one minivan incentive - $500 customer cash on short-wheelbase Voyagers and Caravans through March 31. But in spring 1994, the company aggressively promoted a national minivan sale. Another promotion could capitalize on the spring selling season and counteract Ford's assault.


Some dealers hope Ford will announce a national cash-back program on the Windstar, either on purchases or leases. More certain is a 24-month subsidized lease, possibly permitting promotion of monthly lease payments below $300, dealers said. Ford is the U.S. market leader in leasing.

Ford's lease subsidies take two forms: discounting the interest rate - or money factor - charged to dealers on lease contracts and increasing the vehicle's residual value at lease termination. The Windstar's residual is now set at 64 percent of the sticker price.

Dealers expect the money factor on Windstar leases to be discounted below market rates. In early January, dealers expect Ford's standard lease rate to rise from the current 9.5 percent to 10.25 percent, reflecting recent hikes in short-term interest rates by the Federal Reserve Board.

Money factor reductions are being used regionally now.

For example, dealers in the Boston, New York and Philadelphia regions began offering a 24-month subsidized lease on Windstars last Tuesday, Dec. 20. The program - which runs through Jan. 4 - is based on a 8.25 percent lease factor. Dealers get $250 cash back for each Windstar leased.

Windstar is advertised at a $298 monthly lease rate. The monthly payment is based on a 1995 Windstar GL with a $22,625 sticker and a 64 percent residual value.

A similar program began in Ohio on Dec. 20 and continues through Jan. 4.


In California, dealers began offering a 24-month Windstar lease that relies on the standard 9.5 percent money factor and 64 percent residual rate but gives customers $750 cash. The program runs through Jan. 7.

'We're selling them. They don't just sit on the lot,' said a new-car salesperson at a California Ford dealership.

The five-state Windstar Red Carpet Option Program began Nov. 17 and continues through Jan. 4 in Texas, Louisiana, Kansas, Arkansas and Oklahoma.

Customers receive $950 in cash and agree to payment terms for 24 to 36 months. At program termination, the van may be paid for and retained or turned in. Customers also can opt to refinance the remainder of the acquisition cost at the same finance rate and monthly payment.

Parrish Vaisipour, new-car and truck sales manager at Park Cities Ford in Dallas, said the program has boosted Windstar sales 40 percent.

'Ninety percent of the public are payment buyers, and this way you can get a lot more car for less money,' Vaisipour said.

He uses the $950 cash and an additional $1,000 down payment to reach a $300 monthly payment on a $22,000 GL model.

-----------------------------------------------------------------------TOO MANY MINIS

Big 3 minivan inventories as of Dec. 1:

Days' supply

Chrysler Town & Country76

Dodge Caravan88

Dodge Caravan C/V58

Plymouth Voyager104

Ford Aerostar95

Ford Windstar89

Mercury Villager89

GMC Safari99

Chevrolet Lumina103

Chevrolet Astro109

Olds Silhouette90

Pontiac Trans Sport87


1994 production through Dec. 22: 212,055 units* 1994 sales through November: 109,292 units

* Estimated

ATTENTION COMMENTERS: Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Email Newsletters
  • General newsletters
  • (Weekdays)
  • (Mondays)
  • (As needed)
  • Video newscasts
  • (Weekdays)
  • (Weekdays)
  • (Saturdays)
  • Special interest newsletters
  • (Thursdays)
  • (Tuesdays)
  • (Monthly)
  • (Monthly)
  • (Wednesdays)
  • (Bimonthly)
  • Special reports
  • (As needed)
  • (As needed)
  • Communication preferences
  • You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.