July 18, 2002

Zero percent financing helps Ford, GM gain market share in U.S.

Detroit, Michigan – Efforts by U.S. automakers to encourage customers to visit dealer showrooms in the wake of the September 11 terrorist attacks have paid off for both Ford Motor Company and General Motors Corporation, according to an analysis by R. L. Polk & Co.

Zero percent financing incentives launched by Ford and GM helped the companies expand their shares of the U.S. market and increase customer loyalty during October-December 2001, the first quarter of the 2002 model year.

GM increased its share of the U.S. market to 25.3 percent during October-December 2001 – a net gain of nearly two percentage points over October-December 2000. Ford’s market share increased by nearly one percentage point to 20.3 percent during this period. The Chrysler Division of DaimlerChrysler – which offered its zero percent financing incentives after Ford and GM – saw its U.S. market share fall nearly 2.5 percentage points to 12.4 percent.

“Zero-percent financing worked well for GM and for Ford on two important levels,” said Melissa Mullen, manager and industry consultant of loyalty for R. L. Polk & Co. “Zero percent generated repeat sales from existing customers and helped Ford and GM gain new customers from their competitors. As the first manufacturer to adopt zero-percent financing, General Motors was especially successful in turning this special financing program into a significant competitive advantage.”

Total U.S. light vehicle retail registrations for the first quarter of the 2002 model year increased by 19.3 percent over the first quarter of the 2001 model year. The special financing incentives offered by automotive manufacturers helped to facilitate this increase.

Of the traditional Big Three, Ford Motor Company saw the largest increase in customer loyalty during October-December 2001. Loyalty is determined when a household that owns a new vehicle returns to market and purchases or leases another new vehicle from the same manufacturer. Ford increased its loyalty rate by 2.4 percentage points over the same period last year. Of all Ford owners returning to market during October-December 2001, 60.3 percent acquired another Ford Motor Company vehicle. GM increased its loyalty rate as well – to 68.2 percent, up 2.0 percentage points from October-December 2000. GM and Ford also fared well in terms of conquesting, or gaining new customers from competitors. During October-December 2001, GM gained a total of 40,871 conquests above and beyond the same period in 2000. Ford gained an additional 26,587 conquests.

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