Sometimes, you have to wonder what they're huffing up in the boardroom. At Ford
At least, that's what I thought when I first caught wind of the latest Ford plan to sell more of its fuel-swilling trucks and Mustangs. Get ready to be amazed.
Ford's going to offer cheap financing! Yes, Truck Month offers 60-month, interest-free financing on most models, and 2.9% on Mustangs.
If you're thinking, "Haven't we been here before?" you're right. In fact, relying on incentives was the only way Ford, or for that matter GM
Meanwhile, low selling prices, gas-guzzling product mixes, and the onset of non-cheap gas came along and whalloped Ford, GM, and now DaimlerChrysler.
So, why is Ford returning to the cheap-financing well one more time? It's probably just an inventory blowout. At least that's what investors should hope.
But there are a couple of conditions here that make me skeptical. First, to judge by the sale, a big drop in gas prices doesn't seem to have lured enough consumers back into these gas guzzlers. Yes, this month's sales figures show a 5% jump over last year's, with Explorer and some other truck model sales spiking over last year's hurricane-hobbled figures. But how many did Ford expect to sell if it's got to resort to the sales carrot even as it's moving more product?
Moreover, the fact that the company seems unable to move enough of its more economically-minded models, like the Fusion -- which gets 1.9% financing in this promotion -- may indicate bad things for Ford in its battle for midsize sedans.
Still, investors at this level may see some light at the end of the tunnel. I continue to believe Ford is not as bad off as GM, which has seen some impressive stock gains despite its problems. Somehow, Mr. Market has been less impressed with Ford's way forward, which has prompted plans to shutter plants and otherwise cut costs across the board.
For this week, the question remains: Can an American car icon staunch the bleeding by giving away goods at even cheaper prices? Watch Ford, and we'll all find out.
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