GM Adds New Sales Incentives

DETROIT April 1, 2004; Reuters reported that General Motors added new U.S. sales incentives of an extra $1,000 cash-back and interest-free financing on loans for up to five years on most of its pickup trucks and sport utility vehicles, GM said on Thursday.

The extra $1,000 "bonus" cash is in addition to cash rebates of up to $3,500 on many models. The new incentives are available on most 2003 and 2004 model year vehicles, and consumers must take delivery of the vehicles by June 1, GM said.

GM, which has a goal of stronger U.S. market share this year, expects to report higher U.S. sales vehicle sales for March later on Thursday. Sales are expected to grow about 10 percent from February, the automaker said, which would translate to about a 7 to 8 percent gain year-over-year.

The stronger results from weak levels a year ago during the war in Iraq could help GM clear inventories of unsold vehicles, but it may not be enough to allow sales incentives to fall, analysts said.

GM spent an average of $4,211 in sales incentive per vehicle sold in the United States in February, the highest rate in the industry, according to Autodata. But according to Edmunds.com, an online resource for automotive information, the Chrysler arm of DaimlerChrysler AG spent more per vehicle in incentives than GM.

Analysts expect U.S. vehicle sales across the industry for March, scheduled to be reported later Thursday, to hit an annual rate of about 16.7 million cars and trucks, up from February and year-ago levels.

Some vehicles are excluded from the new incentive program, including the Hummer H2, most Cadillac SUVs and trucks and some large work pickup trucks.