GM offers zero-percent financing on pickups

DETROIT July 30, 2007; Jui Chakravorty writing for Reuters reported that General Motors Corp said on Monday it had begun offering zero-percent financing for up to 60 months on the extended and crew cab versions of its 2007 pickup trucks in response to competitors' discounts.

"We want to be competitive in the marketplace and there has been increasingly heavy spending by our competitors," said John McDonald, GM spokesman.

Sales of full-size pickups, which rely on buyers in industries like construction, have been hurt by weak housing starts and higher gas prices. U.S. sales of full-size pickups have slipped 2.4 percent so far this year.

Ford spent an average of $4,351 per vehicle in June on incentives for light trucks, which include sport utility vehicles. Chrysler spent $4,858 per vehicle on that category while GM spent $2,785.

Toyota spent $1,902 per vehicle, which was less than Detroit's Big Three, but about 13 percent higher than its incentive spending a year earlier.

Analysts expect the pressure for discounts to remain strong for the remainder of the year.

That trend was underscored by Toyota's June announcement that it was offering buyers cash rebates of up to $3,500 or interest-free loans for five years on the Tundra, a new pickup it introduced in February.

Chrysler, which leads the industry in average incentive spending, is offering rebates of up to $5,000 and zero-percent financing on its Dodge Ram pickup.

Ford is also offering zero-percent financing and $2,007 cash back on pickups and sport utility vehicles.

PICKUP SALES DOWN

Sales of GM's full-size pickups fell 27 percent in June, while Ford's market-leading F-series pickups fell 4 percent. Sales of Chrysler's Dodge Ram pickups were down 7 percent in June.

The GM sales incentive took effect on Saturday and runs through September 4, McDonald said.

Regular cab models, which represent a minority of the lineup, are excluded from the offer.

The pickup truck segment is closely watched because it remains a stronghold for the Detroit-based automakers, even as they lose market share in other categories to Asian rivals.

Pickups have also been among the most profitable vehicles. The price of a well-equipped, large pickup truck can range between $30,000 and $50,000 -- well above the average sale price of $29,000 for a new vehicle.

On a combined basis, GM, Ford and Chrysler control more than 90 percent of the U.S. full-size pickup market.