NEW YORK (CNN/Money) -
Ford Motor Co. responded to General Motor Corp.'s zero-interest financing offer with one of its own Wednesday, just a day after announcing a less attractive incentive plan.
Ford is offering zero-interest financing on all 2002 models except the Thunderbird, the compact Escape sport/utility vehicle and the compact SVT models.
The zero interest option is available for purchases through Sept. 3, and buyers can chose cash back of $1,500 to $3,000 instead on a minimum three-year financing package. Zero interest is offered for a financing package as long as five years on some models..
The plan Ford announced Tuesday offered zero-interest for only a handful of 2002 models and only for three-year financing packages. Cash available under Tuesday's offer was similar to Wednesday's offer.
The announcement applies to only to Fords, and while a spokesman for the company's Lincoln and Mercury unit said an announcement is coming about a zero-interest offer for those makes, it is not ready yet. There was no immediate word on incentives for Ford's higher-priced imported makes such as Volvo, Land Rover and Jaguar.
The new offer was no surprise. Ford executives suggested Tuesday that an enhancement of the incentive package would be made in response to GM's more generous offer.
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"We owe it to our customers and our dealers ... to be competitive in the marketplace," said George Pipas, Ford's head of sales reporting and analysis, in comments to analysts Tuesday. "[Ford CEO] Bill Ford said earlier this year we won't be left at the gate."
GM also led the way to zero interest financing last fall in the wake of the Sept. 11 terrorist attack as a way of spurring sales in that uncertain environment. The offer proved popular and was widely matched in the industry, leading to record U.S. auto sales in October. But it helped lead to losses at Ford and Chrysler Group, the North American unit of DaimlerChrysler.
This latest offer is aimed at clearing out dealers' inventories of 2002 models to make room for the 2003 models that are due to arrive soon.
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Shares of Ford (F: down $0.29 to $15.47, Research, Estimates) opened about 2 percent lower Wednesday following the announcement.
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