Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, September 17, 1994 TAG: 9409210050
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: By CLAUDINE WILLIAMS STAFF WRITER
DATELINE: LENGTH: Medium
If Ford and Honda were thoroughbreds, they would be neck-and-neck in the homestretch of a high-stakes horse race.
However, as the model year comes to a close, the ultimate winner in a sales battle between the automakers may be consumers.
Seeking to recapture some sales lost to Honda Motor Co., Ford Motor Co. last week announced an array of buyer incentives - cash rebates, lease deals and low-cost financing - to buyers of the Taurus and its sister car, the Mercury Sable. Ford hopes the promotion will spur sales of its family sedans and maintain Taurus' two-year position as the nation's best seller.
The battle dates to 1992, when Ford's Taurus outsold Honda's Accord, which had been the best-selling passenger car in America for two years. Recapturing the title was hailed as a significant sign for the U.S. auto industry.
The auto companies take the competition seriously, and Western Virginia dealers say that the race is in full swing.
"We will do everything we can to sell a Taurus," said Doug Simmons, sales manager at Holiday Ford in Blacksburg. "I may even lose a bit of money to sell a Taurus."
Ford enjoyed a comfortable 15,000-car lead over the Accord until Honda announced a special lease package at the beginning of August. Sales rocketed, and the Accord overtook Taurus. By the end of last month, Honda had delivered 40,135 Accords; Ford, meanwhile, had sold or leased 24,432 Tauruses.
For the first 11 months of the 1994 model year, Honda sold or leased 245,404 Accords, and Ford delivered 243,957 Tauruses, putting the Accord 1,447 cars ahead.
The race is on.
The stakes are high. Having the country's best-selling car gives one company bragging rights for advertising campaigns.
Sales of new models typically begin in October and end the following September.
To live up to its ads and to regain its No.1 position, Ford has begun $750 rebates on 1994 models and $500 rebates on '95s. In lieu of rebates, consumers can opt for 2.9 percent financing on a Taurus for either year's models. The base price for a '94 Taurus is $16,240; a '95 sells for about $17,720. Accords are being advertised by Western Virginia dealers for about $13,500. But the final price of a car generally is the result of negotiations between dealer and customer.
Ford this week said its 1995 cars prices would average 1.4 percent higher than 1994 models, in part because of added equipment. Its average car retail prices will increase 1.3 percent, or $250 per vehicle, and average truck prices will rise by 0.2 perent, or $40, Ford said. Honda has not yet released its 1995 prices.
There usually are no rebates for the first few months of the model year, said Ben Thomas, Ford sales manager at Farrell Ford Pontiac Mazda in Salem. But "Ford is pretty aggressive and pretty proud; they don't like to come in second," Thomas said.
Indeed, the stakes may be higher for Ford. The company has much of its 1995 advertising completed, and some of those ads tout Taurus as America's best-selling car.
Honda dealers say they are more concerned with owner loyalty than being No.1.
They also are offering incentives, but only to current Honda owners. This week, Honda mailed a million letters to Honda owners offering to pay the first monthly payment if they buy a '94 Accord.
"We want to reward our loyal customers," said Jack Boothe, general manager of Hokie Honda in Blacksburg. "Ford created a race; we are not taking a position."
The Associated Press contributed to this report.
by CNB