GM Plans to Continue Incentives

DETROIT October 29,2002; AP reports that General Motors Corp. plans to continue the incentive blitz it launched 13 months ago, according to its vice chairman and chief financial officer.

"We're not going to sit back and say a little bit (of market share gain) is OK. We're going to be aggressive in the marketplace," John Devine told The Detroit News for a story publsihed Tuesday.

GM since Oct. 10 has offered an incentive package that includes zero percent financing for up to 60 months, no monthly payments for 90 days and no down payment for qualified buyers of all new 2002 and most 2003 model Buick, Cadillac, Chevrolet, GMC, Oldsmobile, Pontiac and Saturn cars and trucks.

The program runs through Thursday. GM spokesman Dan Hubbard said Tuesday that the automaker would "continue to have compelling offers" after that, but he declined to elaborate.

Through the first nine months of the year, GM's U.S. market share has climbed 0.3 percentage point to 28.1 percent, but remains below historical levels of 30 percent and higher.

The automaker's internal target is for it to hold 29 percent of the U.S. light vehicle market by the end of the year.

GM needs to maintain its current spending levels on incentives, said Walter McManus, executive director global forecasting at the market research firm J.D. Power and Associates.

"The question is, how much would they lose if they didn't spend that much? In September, they saw what happened," McManus said.

When GM temporarily suspended zero percent financing at the beginning of September, sales momentum stalled, resulting in a 13 percent decline in unit sales, even after the offer was restored.

To compete for customers in the sluggish economy, Ford Motor Co. and the Chrysler Group of DaimlerChrysler AG joined GM in offering lucrative incentives.

Ford is offering zero percent financing on most 2003 Ford brand trucks and sport utility vehicles through Jan. 2.

DaimlerChrysler is offering zero percent loans for periods less than five years on 23 different 2003 model cars and minivans. Cash rebates on certain models range from $1,000 to $2,500.

Since September's sales falloff, zero percent financing has remained a prominent weapon in GM's arsenal. October auto sales figures are to be released Friday.