Ford expands financing offers to match rivals' plans

July 5, 2002 DEARBORN, Mich. Bloomberg News said that Ford Motor Co.,expanded its no-interest loans to match U.S. rivals in using the incentives to clear out 2002 model cars and trucks.

Almost all Ford-brand cars and trucks including the Taurus sedan will have no-interest loans available, for as long as 60 months, expanding an offer announced Wednesday of interest-free, 36-month loans on three models, spokeswoman Susan Krusel said. General Motors Corp. and DaimlerChrysler AG yesterday unveiled zero-interest loans for most models.

Ford "needed to do this to stay competitive," said analyst Mike Wall at IRN Inc., which forecasts automakers' vehicle plans for suppliers. "They need some way to get product out the door."

U.S. sales at Ford declined 11 percent last month, more than the industrywide drop of 1.7 percent. General Motors sales rose 4.3 percent and Chrysler fell 3.6 percent. Ford, trying to recover from losses in 2001 and the first quarter, was hurt in June by not matching discounts offered by General Motors and Chrysler.

Ford and rivals are willing to forgo some profit on each sale if it means they can move more cars and trucks. Shares of Dearborn, Michigan-based Ford slid 25 cents to $15.51 in early trading, and have declined 1.2 percent this year. The stock has outperformed the 18 percent decline in the Standard & Poor's 500 Index this year.

In its original plan announced yesterday, Ford had offered financing as low as 0.9 percent on most models. The automaker had wanted to avoid emphasizing zero-percent loans, and ended up changing plans after General Motors and Ford announced their no-interest loan plans.

"The competitive environment had gotten more intense over the past couple of days," Krusel said. "We always said we would stay competitive."

As an alternative to no interest, Ford also is offering cash rebates of $1,000 to $3,000, depending on the model. Two models are exempted from no-interest loans, the Escape small sport-utility and the Thunderbird sports car.

Ford increased incentives on the Escape. The company had offered $500 cash back only. With today's revision, Ford is offering $1,000 cash back or financing as low as 2.9 percent.