GM Sweetens Incentives to Boost Sales

DETROIT October 1, 2003; Reuters reported that General Motors Corp. sweetened its U.S. sales incentives on much of its lineup, and offered "bonus cash" on many pickup trucks and sport utility vehicles, to help lure customers into showrooms.

The new incentives increase the cash payments offered and extend zero-percent financing to more vehicles. The deals include cash rebates totaling up to $4,500 on some models and interest-free loans for up to five years on most 2003 and 2004 model-year passenger cars and trucks, GM said.

GM, the world's largest automaker, has led Detroit's profit-eroding incentive war for the past two years as it sought to bolster demand for new vehicles and offset lackluster economic growth.

GM and other leading automakers were due to release their September U.S. sales results later on Wednesday. After an extremely strong August, September sales are expected to fall back to more normal levels.

The high costs of incentives have forced automakers to cut costs further. Ford Motor Co. said this week that it will cut about 3,000 salaried jobs in the United States, in addition to job cuts at its unprofitable European operations.

GM's new incentive program includes "bonus cash" of $500 or $1,000 on many of its highly profitable pickup trucks and sport utility vehicles.

Big Three automakers have been forced to offer higher incentives on pickups and SUVs, their strongest products, as Asian and European automakers have come out with new models. Nissan Motor Co. Ltd.'s new Pathfinder Armada full-size SUV officially goes on sale on Wednesday, and later this year Nissan will launch its new Titan full-size pickups. Both vehicles are Nissan's first in those segments.

GM's incentive program includes zero percent financing for loans of up to five years, and 1.9 percent for six-year loans, for both 2003 and 2004 models.

GM is offering cash rebates of $3,000 cash, plus bonus cash of $500 or $1,000 on many pickups and SUVs, on the bulk of its lineup. For its 2004 models, GM is offering $2,000 cash plus bonus cash of up to $1,000 on pickups and SUVs, for most of its lineup.

Hummer SUVs, Cadillacs and Saabs are excluded from the cash rebate and extended zero-percent financing offers.

GM's incentives expire on Nov. 3 for its 2004 models. The incentives on its 2003 models expire on Jan. 2.