That, coupled with higher warranty costs and lower sales in China, led the company to lower its projected range for 2019 earnings before interest and taxes by $500 million, to a maximum of $7 billion. Ford's net income fell 57 percent to $425 million in the quarter, including a $1 billion hit in one-time charges tied to its restructuring.
Incentives on the Ranger midsize pickup as a percentage of its average transaction price are 12.2 percent, nearly double the segment average of 6.2 percent, according to Power Information Network data provided to Automotive News. Similarly, Edge incentives are at 23 percent of the average transaction price, vs. a segment average of 11 percent, the data shows. F-series incentives are around 11 percent, roughly in line with competitors, although that number also includes the Super Duty.
Overall, Ford's October incentives are at 13.7 percent. The industry average is 11.8 percent.
"We've seen incentives gradually increasing," said Michelle Krebs, executive analyst for Autotrader. "There's two main reasons you use incentives: You either do it to protect market share or grab market share. I don't know if Ford underestimated the battle and dip in retail demand. I would have thought they would have expected it."
Despite the incentive hikes, Joe Hinrichs, Ford's president, automotive, said warranty costs were the biggest factor in its guidance drop. One factor is continued fallout from faulty dual-clutch transmissions in the now-discontinued Focus and Fiesta sedans.
CEO Jim Hackett said Ford "has a handle" on the issues but that it might be some time before the improvements affect the company's results.
"The product development process has been redesigned," Hackett said. "The benefits of all that are in the next generation of products."