USA: Now it's six years of cheap-rate loans on most GM vehicles - report
General Motors on Friday further expanded customer incentives, offering six-year loans at a rate of 1.9% on most vehicles to boost sluggish US sales, Reuters said, adding that the new incentives come on top of GM's zero-percent financing offer on five-year loans on most cars and trucks announced earlier this month.
Up to now, GM had only offered six-year loans on a few models, like the Chevrolet Cavalier and Pontiac Sunfire small cars, and the Chevrolet S-10 and GMC Sonoma compact pickup trucks, the news agency said.
"This is the first time it's been as broadly across the board as it is now," GM spokeswoman Deborah Silverman told Reuters, adding that Cadillacs, Hummers and Chevrolet Corvette sports cars are excluded from the new loan programme.
Reuters noted that Ford has been offering six-year, 1.9% loans on a number of its vehicles since early May, including the Taurus mid-size car and the Ranger compact pickup truck.
US new vehicle sales for May, traditionally one of the strongest months, were weaker than April's levels, John Smith, GM's group vice president for North American vehicle sales, service and marketing, said on Thursday according to the news agency which noted that GM executives have admitted that the automaker's incentives, which helped drive consecutive annual US market share gains, have not been as effective in recent months.
Reuters said GM has lost more than a point of US market share year-to-date, which stands at 27%, while Ford's share has gained slightly to just over 20%, excluding its foreign import brands Jaguar and Volvo.
The news agency said weak US sales outlook spurred Prudential Securities to cut its rating on GM to "sell" from "hold" on Friday, sending its shares lower.
"We have taken our market share assumptions (for GM) down at the same time as we've lowered our industry outlook," Prudential analyst Michael Bruynesteyn said in a research note cited by Reuters.