Ford to offer incentives on slow selling Escape Hybrid
#1
Speaks French in Russian
Thread Starter
Ford to offer incentives on slow selling Escape Hybrid
Sales have cooled this year as company doubles incentives to as much as $1,000 per vehicle.
John D. Stoll / Dow Jones
http://www.detnews.com/apps/pbcs.dll...603080370/1148
John D. Stoll / Dow Jones
DETROIT -- Ford Motor Co. is pumping millions of dollars into a marketing push and offering a fresh round of incentives to generate momentum for sales of sport utility vehicles with hybrid engines, as demand for the vehicles shows signs of fatigue.
Ford dove into the segment in 2004 with the launch of its Escape Hybrid SUV in a bid to woo buyers concerned about gasoline prices and environmental issues. Hybrid vehicles use both a gasoline power plant and an electric motor that powers the car when it idles and accelerates.
The automaker's effort to emphasize hybrids is in its nascent stages. It built 19,000 hybrids for the North American market last year and sold 17,000, accounting for less than 10 percent of total hybrid sales in the United States. By 2010, Ford plans to produce as many as 250,000 hybrids a year.
But hybrid sales have cooled off this year, according to sales reports from Ford and interviews with many dealers. So far this year, Ford has sold about half of the hybrids it has capacity to make, and the company recently doubled cash incentives for buyers to as much as $1,000 a vehicle. In the first two months of this year, Ford sold only about 2,000 hybrid-equipped vehicles.
Ford, which had a loss of $1.6 billion in its North American automotive operations in 2005, can't afford a misstep on hybrids. The No. 2 U.S. car producer has put billions of dollars into creating its own brand of hybrid technology and plans to offer the technology on an array of models.
Ford recently launched a marketing campaign featuring the company's chief executive, Bill Ford Jr., and Muppets character Kermit the Frog to promote its "green" image and remind consumers that Ford offers hybrids. The strategy appeared to pay off in February, as Ford sold about 1,200 Escape hybrids during the month, up from about 800 in January.
Building on the momentum is crucial if Ford is to make inroads in a segment dominated by Toyota Motor Corp. and Honda Motor Co., which together account for about 90 percent of the hybrid market in the United States. While Toyota continues to report growth for its most popular hybrid -- the Prius -- the waiting lists that first accompanied Ford's hybrid have evaporated. Toyota's sustained growth is often attributed to strong marketing and a steady stream of new hybrid models.
The technophile crowd willing to open pocketbooks for an American-made hybrid has already been satisfied, said Acton Ford President David Abatsis in Acton, Mass. Abatsis said consumers were initially willing to swallow the $3,000-plus premium charged for a hybrid, but "that group is gone."
Now, dealers say, hybrid buyers are looking more like the average consumer, hunting for a bargain and searching for a standout automobile. Ford's $27,000 Escape Hybrid, and its low-volume $30,000 Mercury Mariner Hybrid, are posting weak results as many buyers compare the vehicles with nonhybrid versions of the same car that sell for as little as $17,000 when incentives are factored in and get respectable gasoline mileage.
Ford spokesman Jim Cain said the company has no plans to cut sticker prices or offer more-competitive lease rates on its hybrids.
"We're just starting to flex our muscles in the hybrid market," he said, noting the company plans to introduce at least seven new hybrids by decade's end.
He said factors such as a new federal tax credit for hybrid buyers and another potential surge in gasoline prices could increase demand for Ford hybrids in the near term.
Ford dove into the segment in 2004 with the launch of its Escape Hybrid SUV in a bid to woo buyers concerned about gasoline prices and environmental issues. Hybrid vehicles use both a gasoline power plant and an electric motor that powers the car when it idles and accelerates.
The automaker's effort to emphasize hybrids is in its nascent stages. It built 19,000 hybrids for the North American market last year and sold 17,000, accounting for less than 10 percent of total hybrid sales in the United States. By 2010, Ford plans to produce as many as 250,000 hybrids a year.
But hybrid sales have cooled off this year, according to sales reports from Ford and interviews with many dealers. So far this year, Ford has sold about half of the hybrids it has capacity to make, and the company recently doubled cash incentives for buyers to as much as $1,000 a vehicle. In the first two months of this year, Ford sold only about 2,000 hybrid-equipped vehicles.
Ford, which had a loss of $1.6 billion in its North American automotive operations in 2005, can't afford a misstep on hybrids. The No. 2 U.S. car producer has put billions of dollars into creating its own brand of hybrid technology and plans to offer the technology on an array of models.
Ford recently launched a marketing campaign featuring the company's chief executive, Bill Ford Jr., and Muppets character Kermit the Frog to promote its "green" image and remind consumers that Ford offers hybrids. The strategy appeared to pay off in February, as Ford sold about 1,200 Escape hybrids during the month, up from about 800 in January.
Building on the momentum is crucial if Ford is to make inroads in a segment dominated by Toyota Motor Corp. and Honda Motor Co., which together account for about 90 percent of the hybrid market in the United States. While Toyota continues to report growth for its most popular hybrid -- the Prius -- the waiting lists that first accompanied Ford's hybrid have evaporated. Toyota's sustained growth is often attributed to strong marketing and a steady stream of new hybrid models.
The technophile crowd willing to open pocketbooks for an American-made hybrid has already been satisfied, said Acton Ford President David Abatsis in Acton, Mass. Abatsis said consumers were initially willing to swallow the $3,000-plus premium charged for a hybrid, but "that group is gone."
Now, dealers say, hybrid buyers are looking more like the average consumer, hunting for a bargain and searching for a standout automobile. Ford's $27,000 Escape Hybrid, and its low-volume $30,000 Mercury Mariner Hybrid, are posting weak results as many buyers compare the vehicles with nonhybrid versions of the same car that sell for as little as $17,000 when incentives are factored in and get respectable gasoline mileage.
Ford spokesman Jim Cain said the company has no plans to cut sticker prices or offer more-competitive lease rates on its hybrids.
"We're just starting to flex our muscles in the hybrid market," he said, noting the company plans to introduce at least seven new hybrids by decade's end.
He said factors such as a new federal tax credit for hybrid buyers and another potential surge in gasoline prices could increase demand for Ford hybrids in the near term.
#2
Moderator
Good luck to Ford (Escape-hybrid) and Mercury (Mariner-hybrid). Toyota has got the hybrid market covered with the Prius, Highlander-hybrid, Camry-hybrid, ES-hybrid, RX 400h, GS 450h, LS 600h and the Tundra-hybrid.
Last edited by Trexus; 03-16-06 at 07:59 AM.
#5
Lexus Fanatic
Join Date: Jan 2005
Location: A better place
Posts: 7,285
Likes: 0
Received 0 Likes
on
0 Posts
I believe Toyota offers no incentives on any of its hybrids, which is amazing.
Not to mention Toyota's next gen hybrid system will be released in about 2 years or so, so Ford has a tough battle ahead. Not to mention the GM/BMW/DCX system will be released soon, and that will only increase competition for Ford.
Not to mention Toyota's next gen hybrid system will be released in about 2 years or so, so Ford has a tough battle ahead. Not to mention the GM/BMW/DCX system will be released soon, and that will only increase competition for Ford.
#6
Lexus Fanatic
iTrader: (20)
Originally Posted by Trexus
Good luck to Ford (Escape-hybrid) and Mercury (Mariner-hybrid). Toyota has got the hybrid market covered with the Prius, Highlander-hybrid, Camry-hybrid, ES-hybrid, RX 400h, GS 450h and the LS 600h.
Lots here talk about dealers being sold out but that might be because inventories are kept so low.
#7
Lexus Fanatic
Join Date: Jan 2005
Location: A better place
Posts: 7,285
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by bitkahuna
Speaking of RX400h - does anyone know what the sales levels are? I just looked at the February sales thread and it only shows a combined RX330/RX400h total.
Lots here talk about dealers being sold out but that might be because inventories are kept so low.
Lots here talk about dealers being sold out but that might be because inventories are kept so low.
Scratch that, I checked the Toyota PR for February sales, they give an exact breakdown inside the PR:
http://pressroom.toyota.com/Releases...T2006030112235
"Lexus light trucks earned February sales of 10,512 units, an increase of 3.1 percent over last February. The RX 400h luxury hybrid SUV reported February sales of 1,803 units."
So that's close to 2K per month, which is great.
Also check out the Highlander hybrid sales, even better:
"The Highlander Hybrid gas-electric mid-size SUV reported February sales of 2,631 units."
The HH is keeping the overall Highlander sales up there, despite the Highlander being a dated model, and a redesigned model coming soon.
Trending Topics
#8
Originally Posted by bitkahuna
Speaking of RX400h - does anyone know what the sales levels are? I just looked at the February sales thread and it only shows a combined RX330/RX400h total.
Lots here talk about dealers being sold out but that might be because inventories are kept so low.
Lots here talk about dealers being sold out but that might be because inventories are kept so low.
#9
exclusive matchup
iTrader: (4)
Originally Posted by spwolf
toyota has pulled the production of HH, RX400h and Prius to make way to build up of Hybrid Camry's. They expect to sell as much as 90,000 Hybrid Camry's per year, which is basically 35% of their current hybrid production.
#10
Originally Posted by rominl
which i think is a brilliant idea. i would bet money on sales of hybrid camry over hh and rx as well
#11
Lexus Fanatic
iTrader: (20)
Originally Posted by TRDFantasy
"Lexus light trucks earned February sales of 10,512 units, an increase of 3.1 percent over last February. The RX 400h luxury hybrid SUV reported February sales of 1,803 units."
So that's close to 2K per month, which is great.
So that's close to 2K per month, which is great.
I can't find Escape hybrid sales for comparison though. I was wondering if, despite the fact they're now offering rebates, that their expectations and build levels were just too high but that they're still selling respectable numbers.
#12
Speaks French in Russian
Thread Starter
Originally Posted by r4z0r3ck
i dunno if they will sell that much just by looking at the accord comparo. i havent seen many accord hybrids on the road with respects to their regular counterpart.
I think it will sell fine once the car is introduced mainly due to the price point between the 4 and 6 cylinder cars. The biggest drawback of the Accord is the fact that it cost over 30K and is performance based, but offers little performance advantage. Something I also think isnt good for the 400h, but we already covered that.
#13
Speaks French in Russian
Thread Starter
As far as the Escape Hybrid selling slow...well, its unfortunate for them. They are only trying to sell 19K, a little less than what the Highlander is selling per year. Probably also has to do with the fact that the Escape is such an old truck now. Its been on the market for a very long time with little changes. I also dont think the fuel economy is very impressive as well, and might be incredibly slow considering that I believe it uses the Inline-4 Cylinder engine. That engine must be under a lot of stress.
Do they offer a warranty similar to Toyota/Lexus??
Price maybe a problem. 28K for Escape Hybrid vs. 33K for HH. A little more room power, features and comparable fuel efficiency for the HH.
Do they offer a warranty similar to Toyota/Lexus??
Price maybe a problem. 28K for Escape Hybrid vs. 33K for HH. A little more room power, features and comparable fuel efficiency for the HH.
#15
0% Financing
Ford to Offer 0% Financing
Deal good only in California, Washington, D.C.
Amy Wilson
Automotive News / March 15, 2006 - 8:48 pm
DETROIT -- Ford Motor Co. is offering 0 percent financing on the Ford Escape Hybrid for the first time ever.
Buyers in California and Washington, D.C., can finance the Escape Hybrid for no interest for 60 months. The offer begins Wednesday and runs through April 3.
California and Washington, D.C., are Ford's two hottest hybrid markets, Ford spokesman Dan Bedore said.
"They're hot markets, but sometime you need to put your efforts where they're most likely to have success," Bedore said.
Ford is spending more money on both advertising and discounting the Escape Hybrid this year. In addition to a new television campaign featuring Kermit the Frog, Ford also is offering incentives of up to $1,000 on the Escape Hybrid.
The 0-percent offer cannot be combined with any of those other incentives.
Sales of the vehicle have been slower in some markets than once expected, particularly the New York region, dealers and other sources have said. Ford is fine-tuning the Escape Hybrid's distribution patterns.
But the 0-percent offer is "not about weakness," Bedore said. California and Washington, D.C., are markets " where we can really do well with the Escape Hybrid."
You may e-mail Amy Wilson at awilson@crain.com
Deal good only in California, Washington, D.C.
Amy Wilson
Automotive News / March 15, 2006 - 8:48 pm
DETROIT -- Ford Motor Co. is offering 0 percent financing on the Ford Escape Hybrid for the first time ever.
Buyers in California and Washington, D.C., can finance the Escape Hybrid for no interest for 60 months. The offer begins Wednesday and runs through April 3.
California and Washington, D.C., are Ford's two hottest hybrid markets, Ford spokesman Dan Bedore said.
"They're hot markets, but sometime you need to put your efforts where they're most likely to have success," Bedore said.
Ford is spending more money on both advertising and discounting the Escape Hybrid this year. In addition to a new television campaign featuring Kermit the Frog, Ford also is offering incentives of up to $1,000 on the Escape Hybrid.
The 0-percent offer cannot be combined with any of those other incentives.
Sales of the vehicle have been slower in some markets than once expected, particularly the New York region, dealers and other sources have said. Ford is fine-tuning the Escape Hybrid's distribution patterns.
But the 0-percent offer is "not about weakness," Bedore said. California and Washington, D.C., are markets " where we can really do well with the Escape Hybrid."
You may e-mail Amy Wilson at awilson@crain.com