September 22, 2004


Ford matches GM deals (Reuters, 9/22/04)

Ford Motor Co said on Wednesday it will match rival General Motors Corp.'s offer of interest-free car loans for up to six years on 2004 model-year vehicles.

The second-largest U.S. automaker is offering the loans for 100 hours starting Sunday, two days ahead of GM's similar offer. The Ford incentives, which cannot be combined with any cash-back offers, will expire next Thursday, Ford spokesman David Reuter said.

At this point, fear of inflation should really be considered a psychological disorder.

Posted by Orrin Judd at September 22, 2004 11:41 PM

OJ -

True enough, but I wouldn't rely on the wisdom or strategies of the US auto manufacturers to prove my point.

Posted by: jim hamlen at September 22, 2004 11:52 PM

They aren't notorious for pricing their product at a lower level than they should be though, are they?

Posted by: oj at September 23, 2004 12:04 AM

US auto companies are notorious for overproducing, and having to discount remainders for a loss.

For instance, 90% of GM's profits come from their finance arm, GMAC, and not from manufacturing and selling vehicles.

Posted by: Michael Herdegen at September 23, 2004 2:16 AM

Yes, their prices are unsustainable, thus deflation.

Posted by: oj at September 23, 2004 7:24 AM

Well, their management is unsustainable, anyhow.

Posted by: Michael Herdegen at September 23, 2004 7:45 AM

Their business is unsustainable at this rate. This is a sign that the American consumer is tapped out. Even zero percent financing isn't working.

Posted by: Robert Duquette at September 23, 2004 11:16 AM

Yes, 0% is too high in a deflationary environment.

Posted by: oj at September 23, 2004 11:24 AM

C'mon, even giving cars away is going to cost you in taxes (Oprah's audience will have an average bill of $7000 on their gifts).

Posted by: ratbert at September 23, 2004 11:44 AM

1. It's no coincidence that this is happening 3 years after 9/11, just when all the people who bought with 0% interest are looking to trade up.

2. If the nominal price and interest rate are set by the same person, no outsider has any idea what the actual price and interest rate are.

Posted by: David Cohen at September 23, 2004 4:26 PM