Automobile manufacturers in the United States have been deploying a slew of offers to entice customers to their dealerships to buy their vehicles. Companies like Ford are using tempting rebates to gain profits in addition to their 0% loan offers to get the part underway. Although the ultra low financing and Ford Rebate offers helped get cars off the lot, they did so at the expense of their profit margins. After the prices of GM’s cars fell by 3.2 percent, the company announced a decline in earnings. Even though Ford was engrossed in rebate sales, it came as a disappointment in April to learn that their rates had risen by a meager.2% in the previous quarter. So, how did they manage to pull it off? The automaker made a sly move by raising the price of their Ford Taurus model by $90. They also put a lot of money into promoting cars with high profit margins that weren’t selling out on their own, such as the big F-150 pickup truck, and they made sure to advertise lucrative options on their vehicles. While smart pricing helped the company lose $6.4 billion over two years in 2001, it is now part of a larger strategy to offer this automaker a major turnaround. However, after those two years, the scheme began to display its true bright and beautiful colours, as their prices remained stable in 2002 while GM’s dropped by a full 2%. Now, the scheme has helped them earn an average of $1,400 more per vehicle than GM. see this Ford Dealer
Ford monitors sales data from its distributor network on a regular basis to ensure that its reward programmes aren’t wasting money. The data assists marketers in determining which cars need to boost their sales in each regional market and which cars are performing well on their own. Ford, for example, offered a $1,000 discount on the Escape model, but a much greater $3,000 bonus on the Explorer, which was selling much slower. This allows Ford to spend $300 less per vehicle on promotions than its main competitor, General Motors.
Ford also uses sales data to create limited-edition models for cars whose owners are more likely to invest in high-end features. Ford will raise its profit margin significantly by pushing these options. Customers who are willing to pay more for more luxurious choices are their bread and butter.