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Reuters: GM To Offer No Interest Loans and Rebates

DETROIT - June 26, 2007: Reuters reported that General Motors Corp. on Monday said it would offer qualified buyers zero-percent financing for three years with an additional $1,000 cash on select vehicles as it tries to boost sales at the end of the month.

The discount program would be available on select Chevrolet, Buick, Pontiac and GMC vehicles and would run June 26 through July 9. The vehicles include 2006 and 2007 models of the Chevrolet HHR, Tahoe and Silverado, the Buick Lacrosse and Lucerne, the Pontiac G5 and G6, and the GMC Envoy, Yukon and Denali.

GM is looking to capitalize on the attention expected to be generated by the Michael Bay-directed live-action movie, "Transformers," to bolster its own marketing. Four GM vehicles appear in the movie.

Called the "Transform Your Ride Sale," the event will be advertised on television, radio, print and online. The television spots will incorporate scenes from the new movie.

Smaller rival Ford Motor Co. is also expected to announce a major new incentive program this weekend, according to a person familiar with the plans.

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.

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.

Detroit'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. -- which earlier this month announced its own rebates of up to $3,500 on the Tundra pickup truck.

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

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.

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

GM's average incentive spend per vehicle through May this year was $2,775, up slightly from $2,704 a year earlier, according to an estimate by industry tracking firm Edmunds.

Ford's average spend was $3,084, down slightly from $3,131 a year earlier.