New GM Incentive Program Details

Detroit January 4, 2003; Michael Ellis writing for Reuters reported that General Motors Corp. rolled out new U.S. sales incentives on Friday, scaling back on interest-free loans on most of its sport utility vehicles while raising cash rebates on many of its cars and minivans.

Beginning a new chapter in Detroit's long-running price war, GM said its interest-free financing and cash back incentives will exclude some of its most profitable vehicles --its Cadillac, Hummer, Saab and Chevrolet Corvette models.

Incentives were offered previously on Cadillacs, Saabs and Corvettes, but not on Hummers.

The Detroit automaker, which offered aggressive deals last year when it aimed to boost its U.S. market share for consecutive years for the first time since 1976, shortened its zero-percent financing offer on most of its SUVs to three years from five years previously.

GM will still offer interest-free loans for up to five-year periods on its Chevrolet Blazer, Chevrolet TrailBlazer EXT and the GMC Envoy XL SUVs.

GM will also offer interest-free loans for up to five years, or $3,000 cash back, on many of its cars and minivans on its Chevrolet, Pontiac, Oldsmobile, Buick and Saturn brands. The automaker had previously offered up to $2,000 cash back on many of those models.

For the first time in years, GM will also offer six-year loans on six lower-priced models such as the Chevrolet Cavalier small car, the Chevrolet Tracker small SUV and the Chevrolet S-10 midsize pickup truck.

In October, Ford Motor Co. began offering six-year or 72-month loans on most of its 2003 model-year lineup.

GM said its new incentives will expire on Feb. 28.

Detroit's hefty incentives have kept U.S. auto sales running at a healthy clip, although some analysts say consumers may finally be tiring of shopping for cars and trucks.

Automakers were scheduled to report December sales results on Friday, and GM's high incentives were expected to help boost its sales to strong levels, analysts said. But some analysts said GM could have pulled many sales from this year ahead into December, and its results may slip in the first few months of this year.