Reports: GM to Launch $2,002 Rebate on 2002 Models As Replacement for Financing Program

DETROIT (AP) -- General Motors Corp., which just ended its zero percent financing program, will offer a $2,002 rebate on 2002 models in its place, according to published reports.

The new incentive program is expected to cost the automaker less than the no-interest loans it offered to counter fears that business would lag after Sept. 11.

Ford Motor Co. and DaimlerChrysler AG followed suit on the zero percent financing program because of its popularity. Their financing offers are slated to expire in the next two weeks.

GM television commercials announcing the $2,002 rebates were aired early by mistake in Chicago on Tuesday, The Detroit News reported Thursday. The Wall Street Journal quoted people familiar with GM's plans as saying GM would announce the $2,002 rebates on Thursday.

GM spokesman Brian Akre said he expected his company to make an announcement Thursday, but he would not confirm the $2,002 rebate figure.

``The zero-percent financing effort got a lot of people in the showrooms and moved a lot of metal,'' Morgan Stanley Dean Witter analyst Stephen Girsky told the Detroit Free Press.

Analysts estimate the zero-percent financing represents a savings of anywhere from $2,500 to $7,000 throughout the course of the loan.

Executives at all three major automakers have discussed wanting to de-escalate the industry's rebate wars.

But GM's latest program is an admission that heavy discounts are needed to keep sales from dropping, given the weak economy and the intense competition from Japanese, Korean and European rivals.