Upping the ante

Ford to give drivers free petrol

BBC News

Ford Motor is trying to temper US motorists' worries about soaring fuel prices - by giving away at least $1,000 (£540) of petrol with new vehicles.
In a marketing salvo, it is also offering interest-free finance on nearly all of its 2006 models.

The move comes a week after General Motors (GM) offered to subsidise petrol prices for drivers of its new vehicles.

High petrol prices have slowed sales - especially of sport utility vehicles (SUVs) and trucks.

Desperate measures?

As the cost of oil has surged, consumers have been hit by rising petrol prices - now averaging close to $3 a gallon.

Ford said that as part of its new promotions programme, customers buying a new car would get either a pre-paid debit card for $1,000 of petrol or an equivalent discount on the car's price.

In another incentive, Ford said it would give $4,000 cash back on its Expedition SUV and up to $2,500 on other models.

One analyst described the move as "one of the most generous programmes we've seen in a long time".

"I said Ford was going to be the first to blink when it comes to incentives this summer, and it looks like that was the case," said Jesse Toprak, an analyst with Edmunds.com.

The offers being made are seen as an indication of how desperate manufacturers are to offload unsold vehicles.

Ford, hampered in recent years by heavy losses, saw sales fall 4% in the first four months of 2006.

Sales figures for the motor industry in May are due out on Thursday.

Analysts have predicted that GM will be hit hardest because of its heavy reliance on SUVs and truck sales.

GM, too, has spend the past year deep in the red, as it struggles with slowing sales, resurgent Asian rivals and steep legacy costs of employee healthcare and pensions.