Ford Motor Co.’s incentive spending declined slightly in the first few weeks of its year-end “Friends & Neighbors” promotion, evidence that it’s not a profit-damaging blowout sale, CFO Bob Shanks said today.
Shanks, who answered questions from analysts in a session that was webcast from New York, said investors should not be concerned by the deals or interpret them as a sign Ford is returning to old habits of big discounts.
“Nothing has changed,” Shanks said. “We’re continuing to be very disciplined in terms of production, demand and incentives.”
Shanks said Ford’s incentive spending in the first half of November, as calculated by the Power Information Network, is down from October and flat from a year ago. In addition, its transaction prices are still rising.
“There is no incentive increase,” he said. “This was a marketing program. It was called what it was called to try to attract consumers. We are trying to market our products effectively.”
The “Friends & Neighbors” promotion began Nov. 3 and runs through Jan. 4. Nearly all vehicles in the Ford brand are being offered at no-haggle prices within $200 of dealer invoice, though dealers are free to sell them for less than that.
Ford is advertising the event with a heavy rotation of TV, digital and print ads inviting consumers to get “an inside deal” that normally is available only to employees’ friends and relatives. It’s among a number of aggressive and lengthy year-end sales, with General Motors offering “Black Friday” deals for the entire month and Lexus having already started its annual “December to Remember” event.
Yet Shanks said demand so far this month has been “a little bit weaker” than in the preceding months. He said there is still plenty of opportunity for the month to finish strong due to Black Friday deals and that he’s not concerned even with the prospect of rising interest rates looming closer.
Mark LaNeve, Ford’s vice president for U.S. marketing, sales and service, said this month that the company could enhance the “Friends & Neighbors” offerings for Black Friday and at the end of December depending on how consumers responded to the promotion.