Ford to release a tide of incentive spending

Ford will increase incentive spending to stay competitive amidst pressures from aggressive pricing from its competitors. Also, incentives are necessary to keep sales from falling flat for models that will soon see an update, such as the Mercury Milan or Ford F-150.

Incentive spending could cost Ford hundreds of millions of dollars. While CEO Alan Mulally has said that cutting incentive spending is an important step in turning Ford. Ford says that this incentive spending is not a change to that strategy since the money will be spent in select markets with select products.

Incentive spending can be an alluring proposition when shopping for cars, however, they are hard to reduce once added on a car, and can damage resale value. Detroit learned this lesson hard in the last decade and has said they will make efforts to avoid it. They got drunk on incentives before, for their sake, let’s hope they don’t again.

Source: MarketWatch

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