Ford, Chevy war means more rebates

By Shawn Langlois,
Nov. 6, 2004

SAN FRANCISCO (CBS.MW) -- Age-old rivals Ford and Chevrolet are waging a heated battle to be 2004's best-selling brand in the United States, and it's stacking up to be a fight to the finish.

But what does it mean for consumers?

While executives at Ford Motor (F: news, chart, profile) and General Motors (GM: news, chart, profile) might wince at the notion of even higher incentives, car buyers could be treated to some of the steepest discounts ever offered.

"Make no mistake about it, the Ford and Chevrolet battle has the intensity of the Yankees-Red Sox rivalry," said Paul Taylor, chief economist for the National Automobile Dealers Association. "Both seem to really want the sales title this year."

It's not just the automakers that covet the title, either.

Underscoring the importance of garnering top-selling honors, auto parts maker Visteon (VC: news, chart, profile) offered a $1,000 bonus to workers who buy a new Ford -- an effort, Visteon Chief Executive Michael Johnston admitted in an email, to help its biggest customer retain its lead over Chevrolet.

The deals don't end with employees of Ford's primary supplier. Savvy shoppers can already find plenty of discounting out on the lots, with the potential for even more as the year winds down and competition becomes intense.

"Surprises on sales efforts and customer incentives from both Ford and Chevrolet can be expected in the last two months of the year," said Taylor. "The rest of the divisions may even halt the escalation of incentives while this battle for brands is fought out."

Ford's lead has lasted almost 18 years, but the streak could be in jeopardy as Chevrolet continues to chip away sales, with 2,316,471 Chevys sold through October this year vs. 2,337,222 for Ford.

To echo the words of countless political commentators this week, this race is too close to call.

Ford on top, so far

For the year to date, the Ford F-Series pickup is the best-selling vehicle in the United States, with 777,642 units sold, according to Ward's AutoInfoBank. Chevy's Silverado truck takes the runner-up spot at 575,007 units sold.

Both trucks handed potential buyers record-high incentives in September, with the F-150 offering $4,552 in rebates and the Silverado offering $4,876, reported.

The Japanese dominated the passenger car category without nearly the extent of sales promotions, as Toyota's Camry sold 361,211 units and Honda's Accord sold 325,134.

Chevrolet's best-selling sedans for the month of October were the Impala and the Malibu, trailing the top three Japanese models, while Ford's Taurus and Focus rounded out the top 10 list. pricing and market analyst Mike Chung said that Chevy's leading sellers will probably continue to rack up the sales as incentives trend even higher. Ford will likely counter by pushing its top truck and car brands.

Ford's best chance of keeping its crown, however, probably lies with its new crop of hotly anticipated models, like the new Five Hundred, Freestyle and Mustang.

Chevy's potential coup hinges on the continued success of its Silverado and popular passenger cars, along with its key new models, including the extensively redesigned 2005 Corvette.

But don't expect much in the way of incentives on the new in-demand models. Instead, the two Detroit giants will keep driving discounts on the 2004 versions through the end of the year.

The bargains that looked so enticing in September and October for 2004 F-150s and Silverados could look even better in December, particularly if sales stay close as expected.

What's more, the 2004 models of the companies' flagship sports cars, the Mustang and Corvette, are being sold with rebates of $2,500 and $3,000, respectively, while the 2005 redesigns are likely to move without the need for heavy incentives.

In the end, consumers will decide which brand is America's top choice, and they'll probably save a few bucks in the process.



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