DETROIT
-- Ford Motor Co. plans to start running one of its biggest sales promotions
since the recession next week, offering most vehicles at no-haggle prices
within about $200 of dealer invoice for the rest of the year.
The
“Friends & Neighbors Pricing Event” runs Nov. 3 through Jan. 4, according
to a 20-page guide distributed to dealers. Automotive News obtained a copy of the
guide, which is marked confidential, from a source outside Ford’s dealer
network and confirmed it to be authentic.
The
guide shows discounts of up to 10 percent of the suggested retail price and
says they can be combined with other incentives it already 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.
“This
is truly a rare deal that we can leverage into huge sales and maximized
profits,” reads a note at the end of the guide from Ford’s U.S. marketing
director, Chantel Lenard, and U.S. sales director, David Mondragon.
Ford
will promote the sale with a “heavy” rotation of TV, print, radio and digital
advertising in which Ford employees invite consumers to enjoy discounts
normally available only to their friends and neighbors, 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.”
Ford
officials declined to comment on the sale beyond saying that the automaker had
not announced any upcoming promotions.
Mark
LaNeve -- the former General Motors executive hired by Ford in January as vice
president for U.S. marketing, sales and service -- described the program in the
dealer guide as “an inside deal - now for everyone.”
That
phrasing evokes the wildly popular “Employee Discount for Everyone” sale that
LaNeve ran at GM in 2005 and returned to that approach in late 2008, when GM
was months away from filing for bankruptcy. Both times, Ford and Chrysler followed
suit with similar offers, but all three companies experienced significant
declines in the months after the sale ended.
The
discounts Ford now plans to offer, known as “X-plan,” are not as steep as
employee pricing, which it calls “A-plan.” And Ford, which on Tuesday reported
a record $2.7 billion North American profit for the third quarter, is clearly
not in financial trouble.
Market share flat
But
Ford’s U.S. sales have been lackluster for much of 2015, before rising 23
percent in September. Its market share was flat in the first three quarters
from a year ago, at 15.1 percent, and down from 15.9 percent at the end of
2013.
A
big factor is Ford’s changeover to redesigned versions of the F-150 and Edge,
which reduced inventories for months. But other important nameplates, including
the Escape, Fusion and Focus, have underperformed their segments this year.
Ford
introduced dealers to the sale in a broadcast on Monday. They’re being asked to
hold a kickoff rally with employees and start promoting the event on Nov. 3,
which is the day automakers report October sales and begin their November sales
month. All Ford brand vehicles are eligible, except for high-performance
versions of the Mustang, the F-150 Raptor, the F-550 and above, stripped
chassis trucks and the E-450. The guide does not refer to any year-end
promotional plans for Lincoln.
“This
campaign will show the passion of the brand while offering a truly unique deal,
so please use all the resources available to help make this the best sales
event yet!” LaNeve wrote in the guide.
Maximum price
The
sale sets a maximum price that consumers would pay, though dealers can agree to
sell vehicles for less. The maximum price is 99.6 percent of invoice plus a
$275 administrative fee, minus any vehicle-specific incentives. That’s the same
way X-plan pricing usually works, though it normally requires consumers to
provide a unique personal identification number linked to a particular employee
at a supplier, business partner, fleet partner or other Ford partner.
An
example Ford used in its guide showed that an unidentified vehicle with a
$20,000 sticker price would get a “Friends & Neighbors” discount of $2,000,
in addition to $3,000 in other incentives. However, for some vehicles many
consumers already pay close to or even slightly below the invoice price, so the
sale may not result in any additional savings.
TrueCar’s
website today showed the average price paid for an F-150 SuperCrew XLT with
two-wheel-drive as $191 less than invoice and $3,093 less than sticker, before
$4,000 in customer incentives.
“It’s
an effort to take that price worry away from people, and they’re aggressively
trying to close the year out,” Seavitt said. “They’re after something that
would be different, cut through the clutter and be very simplified.”
Ford
said its incentive spending in September, when it offered no-interest, six-year
loans across most of its lineup, was up $660 per vehicle from a year ago and
flat from August. It had reduced incentives in late 2014 as it began hoarding
F-150 inventories in preparation for building the redesigned, aluminum-bodied
pickup.
At
the same time, its transaction prices rose $1,100 from August to September and
$2,100 from September 2014. The Friends & Neighbors discounts would replace
any interest-free financing offers.