Ford and Chevrolet have launched summer clearance deals to help slumping sales in the United States as well as halt any loss in market share. The brands have launched Labor Day and summer promotions offering zero percent financing for 72 months for a good number of models. Chevrolet is making its deals more attractive by offering 90 days of deferred payments on some of its most popular vehicles.
In a memo sent to dealers, Chevrolet Vice President Brian Sweeney said they are not going to wait until the end of August. Analysts are expecting an overall surge in industry incentives in coming months.
Morgan Stanley analyst Adam Jonas has warned the sales cycle in the US is entering a new period with a dark side as carmakers are pressed to balance slowing consumer demand with increasing inventory levels and more plant capacity starting to become on line.
He said in an August 4 report that despite ideal credit conditions and higher incentive spending, carmakers are finding it increasingly difficult to find the incremental buyer. Ford's promotion includes most MY 2014 car and crossover models, excluding the Mustang pony car, F Series pickups and vans.
Ford’s latest deals were launched July 29 and runs through Sept. 2. The Chevy Labor Day Sale started August 13 and runs through Sept. 2. It is offering 0-for-72 deals as well as 90 days of deferred payments on the MY2014 Cruze, Malibu and Impala sedans; all Camaro models; the Traverse crossover and all Silverado light-duty and heavy-duty pickups.
According to GM spokesman Jim Cain, the carmaker launched the incentive scheme after "Ford started its Labor Day sale a little bit early." He said GM needed a competitive program, adding that the deals should generate consumer interest and showroom traffic.
Both Ford and Chevrolet are trying to halt a skid in their marker shares in the US this year. Ford has seen its market share drop to 14.8 percent in the first seven months of 2014 (1.4 million vehicles sold) from 15.7 percent in the same period in 2013. Chevrolet, meanwhile, has seen its market share drop from 12.9 percent to 12.5 percent (1.2 million vehicles sold). [source: automotive news - sub. required]