Ford Says Buy and Get a Tax Break -- WSJ
29 December 2016 - 7:02PM
Dow Jones News
Dealer group urges small businesses to purchase vehicles before
end of year
By John D. Stoll
Buy a truck and write it off.
That's the message Ford Motor Co. is sending to small-business
owners in an effort to bolster demand for its most profitable
products in the final days of 2016.
The auto maker's dealer group emailed an advertisement Tuesday
to prospective buyers in the U.S. urging them to purchase a work
truck, large sport-utility vehicle or van before the end of the
year to take advantage of potentially substantial tax breaks.
Citing the Internal Revenue Service's Section 179 deduction, which
was recently retooled and made permanent, Ford suggests customers
"could get a big tax break for your business."
The F-series pickup, large Expedition SUV and Transit work vans
are highlighted in the email, which was obtained by The Wall Street
Journal. Ford plans to slow production during the first quarter,
including dialing back output of certain trucks and vans, in a move
aimed at curtailing inventory levels.
Ford's U.S. market share has held steady at 14.9% in 2016, and
it recently put a redesigned version of its F-series Super Duty
trucks on sale to take advantage of surging demand for large
pickups because of low gasoline prices and healthy economic
activity.
The Dearborn, Mich., company relies on big trucks and vans for a
substantial portion of global profit. The company is working to
fund several initiatives, including a $4.5 billion commitment to
electrified vehicles, investments in new mobility ventures and
autonomous vehicles, and a push to add freshened trucks and SUVs to
its U.S. lineup.
Auto makers typically pour on sales incentives and ramp up
advertising to ensure strong December sales. General Motors Co.,
for instance, is currently staging a "Red Tag Sales Event" that
offers a $9,600 discount on certain versions of its Silverado
pickups.
Barclays Capital auto analyst Brian Johnson sent a note to
investors Wednesday projecting a relatively strong December
performance for U.S. light-vehicle sales, but he added that the
industry faces a plateau after seven years of growth. He also said
pricing power is under increasing pressure. Many analysts expect
the auto industry to set a second consecutive annual volume record,
but say that demand is being propped up by hefty discounts.
Ford's push aims to lure buyers by combining existing incentives
with tax breaks being offered on vehicles put in service for
business by Dec. 31. For those who qualify, the entire cost of a
Transit work van can be deducted or as much as $25,000 can be
deducted from the cost of Expedition SUV purchases.
"Thanks to the new guidelines under IRS Section 179 of the IRS
tax code many small businesses that invest in new equipment can now
write-off up to $500,000 worth of these purchases on their 2016 IRS
tax returns," the bulletin said. "Normally, small businesses spread
these deductions over several years. But now, the tax
benefits...allow many small businesses to write off up to $500,000
of qualifying new equipment in the first year it is placed in
service."
Write to John D. Stoll at john.stoll@wsj.com
(END) Dow Jones Newswires
December 29, 2016 02:47 ET (07:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Ford Motor (NYSE:F)
Historical Stock Chart
From Apr 2024 to May 2024
Ford Motor (NYSE:F)
Historical Stock Chart
From May 2023 to May 2024