DETROIT -- Sales of Ford Motor Co.’s cars and smaller crossovers were hurt by the company’s decision to stop offering no-interest financing last month, company officials said Tuesday.
From now through Jan. 4, Ford said, it will offer most of its vehicles with 0 percent, 60-month loans plus $1,000 cash back after dropping its no-haggle “Friends & Neighbors” promotion a month earlier than planned.
Mark LaNeve, Ford’s vice president for U.S. marketing, sales and service, said the November promotion helped drive sales of higher-priced vehicles and trim levels, increasing Ford’s average transaction price by $3,800 from a year ago. But overall sales rose by just 555 vehicles, or 0.3 percent.
“We found that it didn’t work as well on Escape, Focus, Fusion, Fiesta, and that’s part of the reason we’re moving off of it,” LaNeve said Tuesday on a conference call with analysts and reporters. “We just didn’t have the low-interest-rate financing that those customers are looking for, which we’ll have in December.”
LaNeve said Ford’s sales pace quickened as the month went on and that November ended on one of the strongest days “in the last seven or eight years.” But his comment suggests Ford was likely to post a decline without such a robust finish.
Ford said on Friday that it was halting “Friends & Neighbors” five weeks sooner than planned. The sale offered most vehicles at prices within $200 of the dealer invoice amount, which turned out to be roughly the same price that an average consumer already had been paying in previous months.
Despite concerns that the promotion would erode Ford’s margins after reining in big discounts, LaNeve said the company’s incentive spending was flat last month compared with October.
But for the Ford brand, sales fell 13 percent for cars and 9.7 percent for utility vehicles. Ford posted a 19 percent drop for the Escape, its smallest crossover. Erich Merkle, Ford’s chief U.S. sales analyst, blamed a 50 percent reduction in fleet deliveries of the Escape, in addition to lower retail sales.
Sales fell 25 percent for the Focus and C-Max, 4 percent for the Fusion and 0.4 percent for the Fiesta. The Edge, up 39 percent in October, rose just 6.4 percent in November. And the Explorer followed a 26 percent gain in October with a 1.9 percent increase last month, though that was enough to reach its highest November volume since 2004.
Pickups, vans rise
A bright spot for Ford was an 18 percent increase in sales of pickups and vans. Sales of the F series rose 10 percent from November 2014 to 65,192 vehicles — beating the combined total of General Motors’ two full-size pickups for the first time since March. F-series sales were down only about 300 vehicles from October, even though November had five fewer selling days.
LaNeve said last month was the best November ever for the F-150, which has been on the market for nearly a year since its redesign to include an aluminum body. Ford didn’t provide specific numbers on how many of the F-series trucks sold were F-150s.
F-150 sales were hurt earlier this year by tight inventories as Ford ramped up production of the aluminum version. Production returned to full speed in June, though inventories remained below normal through September.
LaNeve said the F series sold for an average of $42,800 last month, $2,700 more than a year ago.
Ford posted a 59 percent increase in commercial van sales, including gains of 98 percent for the full-size Transit and 94 percent for the smaller Transit Connect.
Lincoln sales declined 2.4 percent in what amounted to an unusual month for the brand. Sales of Lincoln’s two car nameplates, which were down 13 percent this year through October, rose 12 percent in November. But sales of its four utility vehicles, up 26 percent through October, fell 8.9 percent last month.