Ford's small-car stumbling block: Young, credit-strapped buyers
 |
Many of Ford's small-car buyers are so-called thin files, having little or no credit history. Those factors can make it impossible to qualify for an affordable loan without a co-signer. |
Reprints
Print
Respond
LOS ANGELES -- Ford Motor Co. says getting young buyers financed is a potential impediment to its ongoing small-car strategy, including the launch next year of the face-lifted 2014 Ford Fiesta with an all-new three-cylinder variant.
"Young people are credit-challenged in a couple of ways," said Amy Marentic, Ford group marketing manager, during an interview before the auto show. She said 26 percent of Fiesta buyers are purchasing their first new car.
Besides having lower incomes and fewer savings for a down payment, many of Ford's small-car buyers are so-called thin files, having little or no credit history. Those factors can make it impossible to qualify for an affordable loan without a co-signer.
 | Marentic: "It's a segment where we intend to lead." |
So for a limited time Ford and Ford Credit are offering "Tier Zero" status to college graduates who also are first-time Ford buyers, Marentic said. Qualified buyers also get a $500 incentive, she said.
Tier Zero is Ford Credit's mostly highly qualified credit tier. That can make new buyers eligible for whatever cut-rate financing Ford Motor Credit Co. offers at a particular time, up to and including 0 percent loans, she said at a press event to introduce the 2014 Fiesta.
For example, on the ford.com Web site Ford is advertising 0 percent loans for 60 months on the 2013 Fiesta through Jan. 2. The Tier Zero offer, which also runs through year end, applies to the Ford Fiesta, Focus, Escape and Fusion models, Marentic said.
Pricing hasn't been announced for the 2014 Fiesta, but she said that when it arrives — in late 2013, reports say — the new model likely will get treatment similar to the rest of the small-car lineup.
Ford's small-car strategy is paying off in terms of conquests and owner loyalty, Marentic said. Since the current generation was launched in 2010, Fiesta is the brand's No. 1 conquest model, with 63 percent of Fiesta customers coming out of another brand. Not only that, she said 61 percent of customers coming out of a Fiesta have bought another Ford.
Marentic said of small cars: "It's a segment where we intend to lead."
You can reach Jim Henry at autonews@crain.com.
