(Adds GM incentives on 2003 models, last paragraph)
DETROIT, Aug 16 (Reuters) - Ford Motor Co. , which is struggling to boost its flagging U.S. sales, said on Friday it is offering cash rebates on most of its 2003 model Ford brand cars and trucks.
The world's second-largest automaker also said it was boosting incentives on some of its 2002 models, by increasing rebates for its Windstar minivan and extending zero-percent finance deals for its Explorer sport utility vehicle and Mustang sports car.
Thanks to a continuing sales battle between U.S. automakers, incentives in July averaged $2,300 per vehicle, and have raised concerns about the profitability of Detroit's Big Three automakers.
New model years traditionally begin in September and automakers often try to sell down stocks of the previous models during the key summer selling season. With the cut-rate deals announced on Friday, Ford will now be offering cash rebates of up to $3,500 on its 2002 Ford models.
Ford's rebates on 2003 models, none of which can yet be purchased with interest-free loans, add up to $1,000 on most models and $500 on select best-sellers including its Focus compact car.
The new incentive program will run until Sept. 30 and Ford said only six of its 2003 model cars and trucks will now be sold without cash-back offers.
Models exempt from the deals include the Escape and Expedition SUVs, the Thunderbird and some of Ford's most popular trucks including the F-150 SuperCrew.
Ford, which is implementing a wrenching turnaround plan after losing $5.45 billion last year, has been hurt by double-digit declines in its U.S. sales most of this year.
Its leading rival, General Motors Corp. , said its U.S. sales of cars and light trucks surged 24.2 percent in July on the back of a costly incentives program.
But Ford, which has been almost as aggressive as GM in terms of discounting, said its July sales inched up just 0.7 percent excluding its import brands -- Volvo, Land Rover and Jaguar.
At the Chrysler side of DaimlerChrysler AG , which saw its U.S. sales fall 4 percent in July, a company spokesman said on Friday that it began offering cash rebates on most 2003 models earlier this month.
GM, the world's largest automaker and undisputed Detroit pricing leader, quietly introduced cash-back deals on some of its 2003 models on Aug. 1.