Ford, Chevy dangle new deals as U.S. sales, share lag
Chevy is sweetening zero-percent financing offers with 90 days of deferred payments on some of its most popular nameplates.
Photo credit: BLOOMBERG
DETROIT -- Ford and Chevrolet are getting a jump-start on summer clearance deals to spur sluggish U.S. sales and stem market-share losses.
The two top-selling brands in the United States have launched Labor Day and summer promotions offering 0 percent financing for 72 months across wide swaths of their lineups. Chevy is sweetening the deal with 90 days of deferred payments on some of its most popular nameplates.
"We’re not going to wait until the end of the month," Chevrolet Vice President Brian Sweeney wrote in a memo sent to dealers on Wednesday. "We need to get it going."
Chevrolet and Ford are leading the way with a new round of deals as analysts project an overall increase in industry incentives in coming months.
Adam Jonas, an analyst at Morgan Stanley, has warned the U.S. sales cycle is entering a new period with a dark side as pressure mounts to balance slowing consumer demand with rising inventory levels and additional plant capacity coming on line.
“Despite ideal credit conditions and higher incentive spending, [automakers] are finding it increasingly difficult to find the incremental buyer,” Jonas said in an Aug. 4 report.
Blue oval deals
Ford's promotion, which runs through Sept. 2, covers most 2014 car and crossover models, excluding the Mustang pony car, F Series pickups and vans, according to the company's Web site.
Ford’s latest deals were launched July 29, a spokesman said Thursday.
The Chevy Labor Day Sale, which began Wednesday and also runs through Sept. 2, offers 0-for-72 deals as well as 90 days of deferred payments on the '14 Cruze, Malibu and Impala sedans; all Camaro models; the Traverse crossover and all Silverado light-duty and heavy-duty pickups.
GM spokesman Jim Cain said GM rolled out the incentive program after "Ford started its Labor Day sale a little bit early."
"We needed to be in the market with a competitive program," Cain said. "We think this will generate a lot of consumer interest and showroom traffic."
The promotions come as both brands seek to reverse a drop in U.S. market share this year.
Chevy's market share fell through the first seven months of the year, to 12.5 percent, or 1.2 million vehicles sold, from 12.9 percent in the year-earlier period.
Ford's share has slipped to 14.8 percent, or 1.4 million vehicles sold, from 15.7 percent a year earlier.
Overall, Ford deliveries have dropped 1 percent and Chevrolet sales have edged up 2 percent in an overall U.S. light-vehicle market that has grown 5 percent this year.
Other brands are also offering summer-clearance deals. Toyota is advertising 0 percent financing for 60 months on the 2014 Avalon, Sienna, Prius, Venza and the mid-year 2014 Camry.
Nissan’s Bottom Line model year-end event offers 0 percent financing for 2014 models for 72 months on the Maxima and Murano, for 60 months on the 370Z Coupe, 370Z Roadster and Pathfinder Hybrid, and 36 months on the Altima Coupe, Versa Sedan, Quest, Murano Crosscabriolet and Juke.
Like Chevy, Dodge’s Summer Clearance Event defers payments for 90 days on 2014 and 2015 models through Sept. 2.
Dodge’s deferred payment offer originally expired Aug. 4 but was extended.
Incentives on rise
The latest deals follow a surge in July incentives across the industry.
Autodata Corp. estimates U.S. incentive spending by automakers rose 13 percent to $2,883 per vehicle last month compared with July 2013. For the year, incentives have climbed nearly 6 percent to $2,702, Autodata says.
Overall, Chevrolet’s incentives have dropped 10 percent this year to $2,889 while Ford’s incentives have jumped 12 percent to $3,214, Autodata says.
Kelley Blue Book senior analyst Karl Brauer said the latest promotions may be a harbinger of the creative ways automakers will need to dangle deals and entice consumers in the second half of the year.
He said incentive spending typically increases after June. But automakers are rolling out deals earlier than usual this year.
“The easy sales are in the books,” Brauer said. “We’ve haven’t peeled away all the layers of pent-up demand but there are signs we are entering a new period where additional catalysts are needed to strip away the next level.”
Kathleen Burke contributed to this report
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