- The Washington Times - Monday, November 22, 2004

A rivalry between Ford and Chevrolet to achieve the best sales record for 2004 is resulting in deep discounts on new vehicles. Ford has beaten Chevrolet consistently for the past 18 years in annual sales, a record Chevrolet wants to change before the New Year.

The battle of the brands between Ford and Chevrolet means their customers in the Washington area can get rebates and financing discounts up to $5,500 off the cost of a new Chevrolet Cavalier and $7,500 off the cost of a Ford Explorer SUV.

Similar rebates and discounts are available on other models from both Ford and Chevrolet.

However, the price breaks come with conditions.

On the Cavalier, for example, Chevrolet is offering $4,000 rebates on most models of the car, which will be discontinued after the 2005 model year. A two-door coupe gets an extra $500 rebate. Another $1,000 is offered if the buyers finance through General Motors Corp., owner of Chevrolet.

Buyers who finance elsewhere or who buy a four-door Cavalier can get no more than the $4,000 rebate.

Similarly, the standard manufacturer’s rebate for the Explorer is $4,500. Up to another $3,000 in discounts is available if the buyer finances through Ford Motor Co. and falls into a special rate category, such as military or new college graduate.

The manufacturer’s suggested retail price for a 2005 Cavalier starts at $10,135 and increases with options. Ford Explorers start at $26,600.

Bob Peck Chevrolet in Arlington advertises a 2005 Cavalier two-door coupe with manual five-speed shift for a sticker price of $10,890.

Hill & Sanders Ford in Wheaton is selling a 2005 Explorer for $24,355, which includes four doors and automatic shift.

The Ford-Chevrolet rivalry reflects the fact the two automakers are targeting the same customers, particularly for the Ford F-Series and Chevrolet Silverado pickup trucks, according to industry analysts.

Professional pride also is a factor as General Motors tries to secure its lead over Ford.

“It’s sort of a comeback for General Motors, but it’s also reflecting the decline in Ford sales,” said Sean McAlinden, chief economist for the Ann Arbor, Mich.-based Center for Automotive Research. “They’re down by 25 percent compared to five years ago. It’s an interesting little race.”

Both Ford and General Motors have earned much of their profit from their financing operations in recent years as competition from Japanese automakers erodes their U.S. market share.

In response, they have increasingly turned to rebates and other incentives to boost sales.

However, industry advocates say buyers should act promptly to cash in on the incentives as they start to diminish.

“I think it’s kind of self-destructive,” said John Thomas, industry analyst for the McLean-based National Automobile Dealers Association. “That’s serious cash.”

Although automakers increase sales with the incentives, they also hurt their earnings, he said.

“I think the trend is toward pulling back a little bit,” Mr. Thomas said.

In one example, Ford and Chrysler said last week they have no intention to match General Motors’ new “Lock n Roll” program, which lets customers lock in a low interest rate on new vehicles as well as the next ones they purchase for up to 10 years.

Mr. Thomas said it is a relatively weak incentive.

“I don’t think it’s going to be a major factor,” he said.

Chevrolet is within striking distance of Ford’s sales volume for the year. Through October, Chevrolet sold 2.30 million vehicles compared with 2.33 million by Ford, according to Automotive News, an automobile industry trade publication.

The manufacturer rebates make up $4,500 of the incentive on Explorers. Dealer and financing discounts make up the rest.

Since Chevrolet started offering deep discounts in the past few days, “We’ve noticed a steady influx in the traffic that’s coming in,” said Grant Williams, general manager of Ourisman Chevrolet in Marlow Heights.

Ford dealers say Ford Motor Co. is using an “aggressive” sales campaign in the past month to stay ahead of Chevrolet.

“Their incentives are as strong or stronger than General Motors,” said Steve Travers, general manager of Koons Ford of Rockville.

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