Ford Switches to Rebates, No-Interest Financing

Ford Motor Co. said Tuesday that it had replaced its employee pricing discount program with traditional cash rebates and cheap loans after the discounts lost their allure with consumers.

Ford, which saw U.S. sales decline 19% in September, has been offering consumers the same low prices that its employees pay for vehicles since July, following a similar move from larger rival General Motors Corp. The big discounts program, called the Ford Family Plan, helped the automaker post two months of higher sales, but lost appeal with U.S. consumers in September.

The No. 2 U.S. automaker said it was now offering traditional cash rebates on some 2006 model-year vehicles.

They include $500 on the Focus, Fusion and Five Hundred sedans and the Freestyle wagon, $2,000 on the Explorer sport utility vehicle and some F-Series pickup trucks, and $3,000 on the large Expedition SUV.

Sales of large gas-guzzling SUVs for Ford declined significantly last month as U.S. gasoline prices soared well over $3 a gallon in many parts of the country. Sales of Ford’s large Expedition SUV fell 60%, while sales of the mid-size Explorer were down 58%. Sales of F-Series pickup trucks declined 30%.

For 2005 model-year vehicles, the Dearborn, Mich.-based automaker is offering no-interest financing for up to 60 months.

Meanwhile, Mitsubishi Motors Corp. said Tuesday that it was extending its offer of one year’s worth of gasoline with the purchase of some 2006 model-year vehicles in the United States.

The offer, previously available only on 2005 model-year vehicles, has been extended to the automaker’s 2006 Gallant sedan and Endeavor SUV.