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Article: Marketing costs skyrocket; Expensive programs account for surge.(Brief Article)
- Article from:
- Automotive News
- Article date:
- October 15, 2001
- Author:
CopyrightCOPYRIGHT 2001 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Zero percent financing jump-started new-vehicle sales after the Sept. 11 terrorist attacks, but it also is boosting marketing costs.
On a $20,000 vehicle, a 60-month, 0 percent loan could cost an automaker as much as $2,800, depending on how much interest the automaker paid when it borrowed the money.
As a result, marketing costs rose to about 16 percent of Ford's North American automotive revenue in the third quarter, said Ford Motor Co. treasurer Lloyd Hansen. The company had anticipated only 14.5 percent.
Expensive programs such as 0 percent financing also are a prime reason that marketing costs account for a growing share of total ...