By OLIVIA MUNOZ, Associated Press Writer Tue Jul 5, 6:47 PM ET
DETROIT - Ford Motor Co. jumped on the employee-discount bandwagon Tuesday, announcing it will join GM and Chrysler in allowing customers to buy vehicles at employee rates.
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Ford's decision follows a huge sales surge General Motors Corp. saw last month because of the heavily promoted discount, which drove monthly sales to their highest total in nearly 19 years. Chrysler said Friday it also would match such programs.
GM has given the same discount it provides to employees to anyone buying most new GM cars or trucks since June 1. The promotion, which was set to expire Tuesday, will remain in effect until Aug. 1. It includes all 2005 GM vehicles except the Chevrolet Corvette, Pontiac GTO and GMC medium duty trucks.
"It's the summer selling season and that first month of the deal helped (GM) clear out a lot of their 2005 models," said analyst Ron Pinelli, president of Woodcliff Lake, N.J.-based Autodata Corp. "To continue with it just makes good sense."
Ford Motor Co. said Tuesday its "Ford Family Plan" will let all customers buy most of its 2005 models at the employee rate beginning Wednesday. The promotion excludes the Ford Mustang, GT and the Escape hybrid. It also will run through Aug. 1.
"Consumers made it pretty clear in the month of June that they wanted a clear plan for purchasing their cars," Ford spokesman David Reuter said.
A Ford Explorer XLT that normally sells for $32,895 costs employees $28,739. After existing customer cash incentives, the sport utility vehicle would sell for $24,739 under the Ford Family Plan. A popularly equipped Lincoln Navigator that normally would sell for $51,145 will be available for $42,133.
At GM, a popularly equipped 2005 Buick LaCrosse CX, which normally would sell for $23,495, costs $19,944 with the discount, and a new GMC Envoy would now sell with a discount of more than $5,990.
DaimlerChrysler AG's Chrysler Group had announced Friday its plan to also match the employee discount incentive starting Wednesday and running through Aug. 1. The plan excludes several models, including the popular Chrysler 300, the Dodge Viper and the Dodge Magnum, Chrysler spokesman Kevin McCormick said.
GM, the world's largest automaker sold 550,829 vehicles last month, up from 374,970 in June 2004. That's a 41 percent increase after accounting for differences in the number of selling days between last June and this June, a sharp contrast from the single-digit growth the company has posted so far this year.
Almost all the growth came from light truck sales, which jumped 69.2 percent to 375,092 vehicles. The Colorado, Equinox, Tahoe and Trailblazer models posted some of the largest sales increases.
Ford said domestic sales fell 2.5 percent in June from a year ago and dropped 4.3 percent for the first six months of the year despite hits like the sporty Mustang and growing sales of its crossover vehicles.
Chrysler's sales were up 1.1 percent in June, but the company saw an 11 percent drop in demand for its popular Chrysler 300C sedan, and a 1.5 percent decline in overall car sales. Chrysler's total sales were up 5.2 percent for the first six months of the year.
Gary Dilts, Chrysler's senior vice president of sales, said the company decided to match GM's offer because customers were attracted to its simplicity.
The discount's popularity came from a combination of aggressive marketing and the appeal of getting an inside deal, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
"The general public views the employee discount as pretty good no matter what business you're in," he said.
The automotive industry also is looking at ways to cut down on large incentives, he said.
"Over the last few years car companies were raising prices to give bigger incentives. Now, they're moving toward more realistic pricing with reduced incentives," he said.
Still, Cole said offering an employee rate to all buyers is a bold step.
"This is a real bombshell. Rarely do we see this type of impact in such a short time," Cole said of GM's soaring June sales. But he warned that more sales now could mean fewer customers later.
In Tuesday trading on the
New York Stock Exchange, shares of GM rose 15 cents to close at $34.80. Ford shares finished up 9 cents at $10.40, while DaimlerChrysler shares fell 38 cents to $40.10.
___
On the Net:
Ford Motor Co.: http://www.ford.com/
General Motors Corp.: http://www.gm.com
Chrysler Group: http://www.chrysler.com
DETROIT - Ford Motor Co. jumped on the employee-discount bandwagon Tuesday, announcing it will join GM and Chrysler in allowing customers to buy vehicles at employee rates.
ADVERTISEMENT
Ford's decision follows a huge sales surge General Motors Corp. saw last month because of the heavily promoted discount, which drove monthly sales to their highest total in nearly 19 years. Chrysler said Friday it also would match such programs.
GM has given the same discount it provides to employees to anyone buying most new GM cars or trucks since June 1. The promotion, which was set to expire Tuesday, will remain in effect until Aug. 1. It includes all 2005 GM vehicles except the Chevrolet Corvette, Pontiac GTO and GMC medium duty trucks.
"It's the summer selling season and that first month of the deal helped (GM) clear out a lot of their 2005 models," said analyst Ron Pinelli, president of Woodcliff Lake, N.J.-based Autodata Corp. "To continue with it just makes good sense."
Ford Motor Co. said Tuesday its "Ford Family Plan" will let all customers buy most of its 2005 models at the employee rate beginning Wednesday. The promotion excludes the Ford Mustang, GT and the Escape hybrid. It also will run through Aug. 1.
"Consumers made it pretty clear in the month of June that they wanted a clear plan for purchasing their cars," Ford spokesman David Reuter said.
A Ford Explorer XLT that normally sells for $32,895 costs employees $28,739. After existing customer cash incentives, the sport utility vehicle would sell for $24,739 under the Ford Family Plan. A popularly equipped Lincoln Navigator that normally would sell for $51,145 will be available for $42,133.
At GM, a popularly equipped 2005 Buick LaCrosse CX, which normally would sell for $23,495, costs $19,944 with the discount, and a new GMC Envoy would now sell with a discount of more than $5,990.
DaimlerChrysler AG's Chrysler Group had announced Friday its plan to also match the employee discount incentive starting Wednesday and running through Aug. 1. The plan excludes several models, including the popular Chrysler 300, the Dodge Viper and the Dodge Magnum, Chrysler spokesman Kevin McCormick said.
GM, the world's largest automaker sold 550,829 vehicles last month, up from 374,970 in June 2004. That's a 41 percent increase after accounting for differences in the number of selling days between last June and this June, a sharp contrast from the single-digit growth the company has posted so far this year.
Almost all the growth came from light truck sales, which jumped 69.2 percent to 375,092 vehicles. The Colorado, Equinox, Tahoe and Trailblazer models posted some of the largest sales increases.
Ford said domestic sales fell 2.5 percent in June from a year ago and dropped 4.3 percent for the first six months of the year despite hits like the sporty Mustang and growing sales of its crossover vehicles.
Chrysler's sales were up 1.1 percent in June, but the company saw an 11 percent drop in demand for its popular Chrysler 300C sedan, and a 1.5 percent decline in overall car sales. Chrysler's total sales were up 5.2 percent for the first six months of the year.
Gary Dilts, Chrysler's senior vice president of sales, said the company decided to match GM's offer because customers were attracted to its simplicity.
The discount's popularity came from a combination of aggressive marketing and the appeal of getting an inside deal, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
"The general public views the employee discount as pretty good no matter what business you're in," he said.
The automotive industry also is looking at ways to cut down on large incentives, he said.
"Over the last few years car companies were raising prices to give bigger incentives. Now, they're moving toward more realistic pricing with reduced incentives," he said.
Still, Cole said offering an employee rate to all buyers is a bold step.
"This is a real bombshell. Rarely do we see this type of impact in such a short time," Cole said of GM's soaring June sales. But he warned that more sales now could mean fewer customers later.
In Tuesday trading on the
New York Stock Exchange, shares of GM rose 15 cents to close at $34.80. Ford shares finished up 9 cents at $10.40, while DaimlerChrysler shares fell 38 cents to $40.10.
___
On the Net:
Ford Motor Co.: http://www.ford.com/
General Motors Corp.: http://www.gm.com
Chrysler Group: http://www.chrysler.com
