Ford's big promotion: A prelude to a fight?

Posts : 1916 Join date : 2013-04-17 Location : Texas

Ford's big promotion: A prelude to a fight?

Quote :: DETROIT -- Ford's "Friends & Neighbors" event, which starts Tuesday, Nov. 3, and runs through Jan. 4, is the sort of big sales promotion that can push rivals to roll out similar deals, potentially closing 2015 with one of the biggest incentive battles in years.

That competition could carry over into 2016, when the industry is expected to have little growth.

"Then you've got a bit of a bloody ocean," said Larry Dominique, executive vice president of industry solutions at True- Car and a former Nissan North America executive. "Every OEM tells me they want to increase market share and increase volume. That's tough to do when there's no more demand. It could set up 2016 to be a very interesting year."

Quote :: Automotive News obtained a copy of a 20-page guide outlining the two-month promotion and confirmed that it matched information distributed to dealers. An introductory note from Mark LaNeve, Ford's vice president of U.S. marketing, sales and service, calls the offer "a truly unique deal" and urges dealers to "use all the resources available to help make this the best sales event yet!"

LaNeve, whom Ford hired in January from its Global Team Ford marketing agency, was GM's North American sales chief when it launched employee-pricing deals in 2005 and 2008. Ford and Chrysler quickly followed with similar deals both times.

A big difference between those times and now is that sales and inventories are at far healthier levels. Automakers report October sales on Tuesday, with forecasts calling for a seasonally adjusted, annualized selling rate of up to 17.9 million.

Through September, 2015 U.S. sales were up 5 percent to 13.05 million vehicles. A similar fourth quarter would result in a full-year total of 17.35 million, just short of the record of 17.402 million set in 2000.

Quote :: The "Friends & Neighbors" deal gives the public access to Ford's supplier discount, known as "X-plan," which is generally higher than employee pricing and within $200 of the dealer invoice amount. Ford plans to run a "heavy" rotation of TV, print, radio and digital advertising to promote it, the guide explains.

"This is not your normal, 'Let's take $500 off a car,'" said Jim Seavitt, owner of Village Ford in Dearborn, Mich.

"Last time we did something like this was ... when things were pretty bad," Seavitt said. "They're aggressively trying to close the year out. They're after something that would be different, cut through the clutter and be very simplified."

Ford's dealer guide shows discounts of up to 10 percent of the suggested retail price and says they can be combined with other incentives it offers. In addition, the sale enables dealers to earn more from each transaction than they otherwise would -- for example, $126 more on a 2015 Focus and $471 more on a 2015 F-150.