Ford throws down gauntlet in marketing battle with GM

Associated Press

DETROIT — Ford Motor Co. Chairman William Clay Ford Jr. says he will match General Motors Corp. dollar-for-dollar in cash and financing incentives as the automakers battle for bigger shares of the U.S. market.

"We’re into the next round, so let’s have at it," Ford said at the Geneva International Auto Show. "We’ll play it as long as we have to. Ultimately, marketing costs as an industry have to come down. But we will be competitive."

The comments came days after GM — pressing its advantage against struggling Ford and DaimlerChrysler AG’s Chrysler Group — reinstated 0 percent financing and rebates on certain models to boost sales and stabilize its share of the American market.

In response, Ford and Chrysler have increased rebates and low-cost financing deals.

Chrysler, Ford and GM executives said they will do whatever is necessary to protect current market share, and will attempt to increase it at the expense of rivals.

In addition to low-rate and zero-percent loans, GM is offering cash rebates of $2,002 on most new models, while Ford cash rebates range from $1,000 up to $2,500. Chrysler is offering rebates up to $2,500 on new models.

GM, the world’s No. 1 automaker, kicked off the latest rebate war in September, offering no-interest financing as a way to spur slumping auto sales in the aftermath of the Sept. 11 attacks.

So far, GM’s spending spree is paying dividends. The automaker’s share of the U.S. market surged to 31 percent in February, while Ford and Chrysler saw declines.

Last month, for the first time in 11 years, GM’s Chevrolet division outsold the Ford brand. And GM is the only Detroit automaker to book North American profits last year, and the only one expected to do so again this year.

"We’re glad to take market share from anybody," GM president Rick Wagoner said. "What were doing is clearly working for us, and that’s why were in it. We’re not targeting any particular companies."

But both Ford and Chrysler are fighting back.

In trading Wednesday on the New York Stock Exchange, GM shares rose 2 percent, or $1.31 a share, to close at $59.92; Ford shares rose 4 percent, or 61 cents a share, to close at $16.35; and DaimlerChrysler shares rose a penny to close at $43.16.