Ford Motor Co. will crack open the incentives vault for a month-end sales blitz that will offer 0-percent financing for as much as 72 months for Ford, Lincoln and Mercury buyers, including those with marginal credit ratings.
The program, called the Labor Day Sales Event, begins Thursday, Aug. 24, and runs through Sept. 5, the day after Labor Day. It will be available on purchases of nearly all 2006 model vehicles, even ones in tight supply. Zero percent financing will be available to customers with marginal credit ratings, not just customers in the top two tiers, as in past programs.
"It's part of our aggressive 2006 sell-down and we want to get our customers the best deal nationwide," spokeswoman Whitney Drake said. "It will move our 2006 inventory."
Dealers said the program will benefit buyers who might have been turned down because of inability to make a monthly payment.
"I have a customer who was turned down, and he'll be approved," one dealer said. "In a matter of a few days, he'll be in a new car."
Ford spokesman Jim Cain said the program extends to customers with "marginal" credit, but not to sub-prime customers. However, a dealer said customers qualifying for Ford's Tier 4 credit rating may as well be considered as having sub-prime credit.
"We are opening the program to a wide base of customers while still being smart business people," Cain said.
Dealers were notified of the program in a conference call Tuesday by Al Giombetti, president of Ford and Lincoln Mercury; and Cisco Codina, Ford's group vice president of North America marketing, sales and service.
Dealers said the Ford GT and some larger F-series work trucks were the only exclusions from the program.
Ford will use a print and Internet push to promote the program, with Website roadblocks on Yahoo and MSN. Television commercials will be limited to regional spot buys.
One dealer complained that Ford is not placing any promotional marketing into national TV ads, instead demanding dealers sharply increase their own local co-op and dealer ad association spending. Cain declined to comment on the allegation.
Ford is struggling with too many cars in inventory. As of Aug. 1, Ford Division had 593,100 units in stock. Ford already has said it would cut fourth-quarter production by 168,000 units, or 21 percent of total output.
Ford Motor also received a kick in the stomach by being outsold by Toyota Motor Sales for the first time ever in July. Ford is trying to cut back sharply on sales to fleet customers, which had padded its true performance.
Ford has not gained U.S. market share since 1995 and is under pressure to speed up cost-cutting efforts after worse-than-expected July sales and a $254 million loss in the second quarter.
Ford accounted for 18.1 percent of 2006 U.S. auto sales through July, down from a 25.7 percent share in 1995. Its vehicle sales have fallen 9.7 percent through July from the same time last year.
Reuters contributed to this report.
You may e-mail Mark Rechtin at [email protected]