Ford and Fiat Chrysler Try to Lure Volkswagen Costumers
October 06 2015 - 2:30PM
Dow Jones News
MILAN—Volkswagen AG, already reeling from the commercial fallout
of the emissions scandal that shaved off a third of its market
value, is now facing stepped up competition in Europe from smaller
rivals Ford Motor Co. and Fiat Chrysler Automobiles NV as they seek
to grab some of the German company's disgruntled customers.
Ford, the fifth-biggest seller of cars in Europe, and Fiat
Chrysler, the seventh biggest, in the past two weeks have added
extra incentives to entice consumers to trade in their old
Volkswagens, Audis and other brands made by the German
manufacturer.
The Ford incentives are available in many European countries
including Germany, France, Italy, Spain and the U.K. while the Fiat
Chrysler incentive is just for cars bought in Italy.
The incentives, which are available for gasoline- and
diesel-powered vehicles, are a bid by Ford and Fiat Chrysler to
take a bite out of VW's dominant 25% share of the car market in
Europe, where the German company last year sold 3.2 million cars,
twice as much as the other two companies combined.
In September, Volkswagen admitted to U.S. regulators that it
installed software on some diesel cars that makes emissions appear
lower in testing than in real-world use. The scandal has led to a
Volkswagen profit warning, the resignation of the chief executive,
and much soul searching among German industrialists, politicians
and the general population.
Ford, through its dealer network, on Sept. 25, just a week after
the scandal became public, began offering consumers between €750
and €1,750 to trade in their Volkswagen Group car regardless of the
age of the vehicle. The incentives had been in place, but were
applied only when the car traded in was from the 2004 model year or
earlier.
The amount of the Ford incentive varies from country to country,
and in Italy ranges from €750 for a consumer who buys a Fiesta to
€1750 for the acquisition of a Focus. The company hasn't said when
the incentive will expire.
"From time to time around the world, we and our dealers offer
special offers to encourage customers not currently driving a Ford
to consider making the switch," said Mark Truby, a spokesman for
Ford of Europe.
Mr. Truby declined to give details on how many VW trade-ins
there have been since the incentives were introduced.
The Fiat Chrysler incentive, which ranges from €500 for a Fiat
500 to €1,500 for a Jeep Grand Cherokee, is paid to the dealer who
then decides whether to pass it onto the consumer. Fiat Chrysler's
incentive runs through the end of the month.
Fiat Chrysler might find fertile ground in Italy for its efforts
to grab VW car owners as the emissions scandal, which became public
on Sept. 18, appears to already have cut into the German company's
Italian sales. Sales of VW brand cars dropped 1.4% in September
while the overall Italian market climbed 17%. Overall VW Group
sales rose 6.1% in the month, below the 9.2% for the first nine
months of the year, on the strength of Audi and Skoda.
Rather than being passed onto new-car buyers, dealers could use
the Fiat Chrysler payout to incentive consumers to buy the VW Group
vehicles they take as trade-ins. Since it is still not clear how VW
will fix the 11 million cars involved in the emissions scandal, it
has been hard to put a value on the German group's vehicles already
on the road, and that could make them hard to move off used-car
lots, said a dealer.
Volkswagen and Fiat Chrysler spokesmen declined to comment.
Ford and Fiat Chrysler have been relatively muted on the new
incentives and haven't advertised them with new marketing
campaigns.
Other car makers—including PSA Peugeot Citroë n, Mercedes-Benz
and BMW AG—said they had no plans to offer specific enticements for
current VW car owners.
Jason Chow and William Boston contributed to this article.
Write to Eric Sylvers at eric.sylvers@wsj.com
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(END) Dow Jones Newswires
October 06, 2015 14:15 ET (18:15 GMT)
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