Source: The Detroit News
Ford deals on new sedan
Automaker gives U.S. dealers cash incentives to move flagship Five Hundred.
By Eric Mayne / The Detroit News
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To boost sales of its flagship sedan, Ford Motor Co. has quietly begun paying dealers $1,000 for every Five Hundred that leaves their lots.
It's the first national rebate program initiated by Ford since the vehicle was introduced six months ago.
But while Ford is struggling to improve sales and profits in North America, it has no plans to introduce customer cash incentives -- despite a setback in April sales for the car.
Ford sold 9,215 Five Hundreds last month, compared with sales of 9,375 in March. It was only the second month-to-month drop in sales for the car since its October introduction.
Ford officials are pleased with the car's early sales pace and say it has helped boost overall demand for the company's car line 3 percent this year.
"The trends are all upwards," said Dan Corby, general manager of North Brothers Ford in Westland.
Called bland and sluggish by some critics, the Five Hundred has been overshadowed by the flashy Chrysler 300.
The 300 has outsold the Five Hundred -- 49,089 to 31,515 -- this year through April.
"But we're closing the gap," said Ben Poore, Ford's car marketing manager.
Ford has limited sales of the Five Hundred to fleet users -- a major source of sales for many car models -- to build brand equity and enhance resale values of the car. Company officials say just over 14 percent of Five Hundred sales have been made to fleet customers who get profit-draining discounts for large volume purchases. In comparison, 24.2 percent of Chrysler 300s have been sold to fleet customers.
Ford spokesman Dave Reuter said the car is on track to meet the automaker's annual sales projection of 100,000 units. Along with the Freestyle crossover and the Fusion sedan -- coming this fall -- the Five Hundred is one of three new models Ford is counting on to replace the Taurus, once the nation's top-selling car.
Taurus production will end next year. Ford is replacing it with three vehicles because consumer tastes have become so diverse.
Bob Kurilko, vice president of online shopping guide Edmunds.com., says Ford's strategy is not unusual for a new model in such a competitive market segment as mid-size vehicles, which the Toyota Camry and Honda Accord dominate.
"Automakers try to introduce vehicles without incentives, then they progress to dealer cash because it's 'behind-the-scenes money,' " Kurilko said. "Customer cash is like 'a bruise on the brand.' It gives the impression, and rightfully so, that manufacturers are paying customers to buy the car."
Dealer incentives are intended to provide the seller with some room to negotiate on price.
"It clearly will help to close deals," Poore said.
You can reach Eric Mayne at (313) 222-2443 or [email protected].