Boston, MA, 02/28/2014 – Ford Motor Company (NYSE:F) will continue to offer its vehicles at deep discounts as the cold winter blast continues to hurt the automaker’s sales in the second straight month. Other automakers like General Motors Company (NYSE:GM) too is resorting to same measures, as per the Reuters report.
As per a report published by Edmunds.com, the U.S. auto figures are likely to be impacted by the winter season’s abnormalities for February as well, as the sales are anticipated to grow at a negligible pace of 0.8% year-over-year. This will be the second month in a row for the carmaker when the sales have been declining, as Edmunds see a 5% decline in its sales. To counter the winter effects, Ford Motor Company (NYSE:F) is among the aggressive discount providers, offering as much as more than $8,000 discount on its full-size Ford F-150 pickup. Apart from the big pick-up trucks, the U.S. dealer is also throwing away steep discounts on a broader range of vehicles ranging from economy to luxury cars, spiking fears for another ‘discount war’ in the industry.
Its All On Weather
Large automakers like Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have to act cautiously in order to keep balance between discounts and price. Right now, Ford has extended discounts for almost all vehicles till March 31. But, RBC analyst Spak mentioned that discounts once floated into the market are hard to take back. According to him the end of the discounts hinges on the weather and secondly, on improved demand from the customers. While Barclays Analyst Brian Johnson sees a slight fall in inventory levels as against January, but asserts that the car production schedules are relatively strong in the first quarter.It is to be noted that surging inventories play a major role in the auto-makers decision to introduce discounts and the U.S. automakers had been surrounded by this issue since the late 2013.