Ford Motor Co. became the second of the Big Three automakers to jump back into the discount game with a program that knocks thousands of dollars off the price of some vehicles.
Ford’s announcement Wednesday came on the same day that the company recalled about 220,000 vehicles from the 2005 model year amid concerns that a battery cable was rubbing against the vehicle frame, potentially causing fires, and that a fuel tank strap could separate after logging tens of thousands of miles. Shares of Ford fell to a new 52-week low after the news.
The announcement also comes two days after General Motors Corp. announced its “Red Tag” discount, which allows buyers to pay a fixed maximum price advertised on the Internet and on red tags at dealerships. Both programs end Jan. 3.
Ford’s plan has a similar no-haggle aspect. Under the “Keep It Simple Plan,” customers are given one consistent, maximum price that will be printed on vehicles’ window stickers. The sticker will show how that price differs from the manufacturer’s suggested retail price. It also will add any cash incentives that are being offered on the vehicle.
For example, Ford said, the MSRP for the 2006 Ford Escape sport utility vehicle is $20,685. Ford’s “Simple Plan” price is $19,794. Ford also is offering $2,500 cash back on the Escape, so the maximum price any buyer should pay is listed as $17,294.
Similarly, the maximum price for the 2006 Lincoln Navigator SUV is $46,747, down from a suggested retail price of $53,175.
Most 2005 and 2006 Ford, Lincoln and Mercury vehicles are included in the program, with the exception of Ford’s new trio of sedans — the Ford Fusion, Lincoln Zephyr and Mercury Milan — the Ford Mustang and the Ford GT.
Ford also is including hybrid versions of the Ford Escape and Mercury Mariner, the first time those vehicles have been included in an incentive program. The Escape Hybrid will sell for $26,104, which is $1,411 less than its suggested retail price.
After their employee discounts this summer, GM and Ford said they wanted to move away from incentives, which cost a lot and can cheapen brands. Instead, they lowered prices and focused more on the value of their vehicles. But consumers didn’t respond and sales sank in October.
The recalls announced Wednesday involved more than 98,000 Ford Crown Victoria, Lincoln Town Car and Mercury Grand Marquis sedans. A separate recall caused by the separation of fuel tank straps involves more than 123,000 Ford Freestyle crossover vehicles, Ford Five Hundred sedans and Mercury Montego vehicles.