Ford and GM To Offer Month End Discounts

SEE ALSO: Ford Buyers Guide
SEE ALSO: Chevrolet Buyers Guide
SEE ALSO: Buick Buyers Guide
SEE ALSO: Pontiac Buyers Guide
SEE ALSO: Cadillac Buyers Guide
SEE ALSO: Hummer Buyers Guide
SEE ALSO: Saturn Buyers Guide
SEE ALSO: Toyota Buyers Guide

DETROIT, June 22, 2007; Reuters reported that General Motors Corp. and Ford Motor Co. plan to introduce discount programs intended to boost sales during the last weekend of June, people familiar with the sales plans said on Friday.

The automakers are expected to roll out the incentive programs for their U.S. dealers next Thursday, just ahead of the Fourth of July holiday, according to two people familiar with early planning for the sales events.

The plans are expected to include some zero-percent-financing offers for GM buyers, they said. The terms of the competing Ford discounts were not immediately available but were expected to be broadly similar, one of the persons said.

Both GM and Ford have held incentive spending largely flat this year as part of an attempt to move away from the kind of blowout sales and volatile monthly sales tallies that dogged results for the Detroit automakers earlier this decade.

Ford spokesman Jim Cain said the automaker had nothing to announce with regard to month-end sales incentives.

Spokesman John McDonald said GM was planning a sales event around July 4 but declined to provide further details.

U.S. automakers typically offer big consumer incentives in the summer months just as they are working down inventory levels in anticipation of a new year of model launches beginning in the fall.

Jess Toprak, analyst at industry tracking service Edmunds, said he expected the discount programs from GM and Ford to target sport utility vehicles and pickup trucks.

He said that would represent a kind of "retaliation" to Toyota Motor Corp.'s announcement last week that it had begun offering rebates of up to $3,500 on its Tundra pickup truck.

"NOT AWFUL"

"Historically, you do tend to see a ramp-up (of discounts) at the end of June through the end of summer," Toprak said.

U.S. automakers have been struggling to hold their retail market share amid near record-high gasoline prices, a weak housing market and fierce competition from Japanese rivals led by Toyota Motor Corp.

GM's vice president of sales, Mark LaNeve, told reporters on Thursday that the overall U.S. auto market remained "challenging" but "not awful."

For GM, the Fourth of July holiday corresponds to the release of the action movie "Transformers," which includes appearances by four GM vehicles, including a GMC truck.

GM has said it would look to capitalize on the attention expected to be generated by the Michael Bay-directed blockbuster to bolster its own marketing.

U.S. auto sales rose just under 1 percent in May, adjusted for an extra selling day. On the same basis, GM's sales rose 6 percent, while Ford's sales fell 10 percent.

Auto sales incentives are widely tracked by analysts as an indication of the relative profitability of competing automakers and the pressure that they face to move inventory.

The automakers do not typically disclose how much they spend on incentives, which can include concessional financing, cash rebates or additional payments to dealers.

On a year-to-date basis, GM's incentives through May were up slightly to average $2,775, up from $2,704 a year earlier, according to an estimate by Edmunds.

Ford's average per vehicle spending was down slightly at $3,084 from $3,131, according to Edmunds.