Ford offers rebates up to $3,000 on SUVs

October 05, 2005|By BLOOMBERG NEWS

NEW YORK -- Ford Motor Co. is offering rebates of as much as $3,000 on its sport utility vehicles as the second-largest U.S. automaker seeks to revive sales after a 19 percent decline in September.

The company's employee-pricing discounts ended Monday.

Now, buyers can get rebates of $3,000 on the 2006 Expedition large SUV and $2,000 on the redesigned 2006 Explorer mid-size SUV, Ford said yesterday. The new offers, which include low-interest financing, started yesterday and run through Jan. 3, the company said.

Ford is trying to set "any kind of incentive or dollar figure that will prop up demand" for the SUVs, said auto analyst Erich Merkle at IRN Inc., a consulting firm in Grand Rapids, Mich.

The new incentives came as Explorer sales fell 58 percent and Expedition sales dropped 61 percent in September. The company sold 12,879 Explorers last month, the lowest since the vehicle was introduced in March 1990. SUVs are being affected by high gasoline prices and competition from new "crossover" wagons that blur the differences between cars and trucks.

The U.S. average price for unleaded gasoline was $2.94 yesterday, according to AAA's Web site, up from $1.93 a gallon a year ago. The highest recorded average price was $3.06 a gallon on Sept. 5, AAA said.

Before the latest rebates, Ford had cut sticker prices as much as 6.8 percent on the 2006 Explorer compared with a year earlier. Prices for the 2006 model range from $27,175 to $33,160, compared with $27,810 to $35,630 for the 2005 Explorer.

Fuel economy is up to 11 percent better on some versions of the 2006 model compared with its predecessor. Sales of the Explorer peaked at 445,175 in 2000 and haven't been above 400,000 since 2002.

Ford also is offering $2,000 rebates on most F-Series pickup trucks and $500 rebates on the 2006 Freestyle wagon and Focus, Fusion and Five Hundred cars. The Fusion is a new mid-size car that went on sale this month.

The lowest financing rate available on 2006 models is 2.9 percent for 36 months, compared with the 6.75 percent prime rate offered by banks to their best customers. Ford also is giving lease incentives on the Fusion.

In addition, Ford said it is offering a combination of rebates or no-interest, five-year loans on most 2005 models. The company's employee-pricing offers, which began in July, have cleared most 2005 vehicles off dealer lots.

Ford shares fell 11 cents to close at $9.78 yesterday on the New York Stock Exchange. Shares are down 35 percent since the employee-price discounts were introduced in July.

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