A month ago, Ford Motor Co. surprised its customers and competitors with a very different kind of sales promotion.
Buyers of the Ford Escort and Mercury Lynx subcompacts would receive two years of free maintenance and repairs covering everything but tires, extra oil required between tune-ups and damage attributable to accidents or negligence, the company said.
On top of that, Ford promised a 5 percent cash rebate on the sticker price. Ford's U.S. competitors are offering rebates, but not the maintenance and repair plan.
The offer has suddenly thawed the long winter freeze in Ford's business, at least temporarily, causing a surge in Escort and Lynx sales, says Robert A. Lusko, manager of Ford's Washington district sales office, which covers the District, Virginia, most of Maryland and parts of Pennsylvania and West Virginia.
The 174 Ford dealers in the Washington district sold only 673 Escorts in December, as the company struggled through the final month of the auto industry's worst year in two decades.
On Jan. 13, the free maintenance and repair program was announced and by the end of the month, Escort sales in the district had jumped 126 percent, to 1,460.
The increased interest in the Escort helped lift sales of other Ford models by pulling more customers into dealers' showrooms, Lusko said. Sales of all Ford cars in the district increased from 2,099 in December to 2,883 in January, a 43 percent gain. And this was at a time when bad weather and the continued depression in the auto market were killing January sales of most cars, he noted.
The demand continues, Lusko said, citing his tallies of daily sales rates. In December, Washington district Ford dealers sold a daily average of 81 Ford cars of all models. In January it rose to 115, and in February, so far, to 134, he said.
Some of the increase is certainly because of the expansion of the cash rebate program to cover Ford Mustang, Fairmont and Grenada car models, as well as the Escort, Lusko said. But based on conversations with customers, he and Ford dealers believe that the free maintenance and repair offer has been the critical incentive.
"That's what did it," said Will Lazernik, sales manager of Jerry's Ford in Annandale. "Customers know they can get a car for $121 a month and all they'll pay after that is gasoline," said Lazernik assuming no accidents or owner-caused damage .
Lusko said the strong Escort sales have prompted dealers to increase factory orders. Jerry's Ford, for instance, ordered a monthly average of 31 Escorts in January and February. Its March order is up to 100 Escorts, triple the average for the first two months of the year. The same pattern exists throughout the local district, he added.
The maintenance program has been extended until April 3. There is an iron rule in the auto industry that a sales boom caused by rebates and other incentives is followed by a downturn or "payback" period. Motorists who would have waited a month or two longer advance their purchases to take advantage of the special terms. Ford expects a payback this time, Lusko said, although it hopes the offer will do some lasting good to Escort's reputation. Meantime, the company and dealers are enjoying the ride.