General Motors on Thursday announced a new round of consumer incentives intended to help clear slow-selling vehicles off dealers’ lots this month.
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GM will give cash bonuses of between $US500 and $1,500 for vehicles that have been in dealer inventories for at least 125 days, GM spokeswoman Deborah Silverman told Reuters. Most of those vehicles will be eligible for $1,000 bonuses, but Cadillacs will be eligible for $1,500.
Cadillac sales were strong at the end of 2004 but fell 3.3% last month, the news agency said, citing Autodata Corp.
Reuters noted the “March Madness” promotion is similar to a red tag sale GM held in December whenits sales fell 7% overall that month but the bonuses helped sales of individual brands like Chevrolet and Cadillac. Cadillac sales rose 19% in December, helping the luxury brand achieve its best sales year since 1990, the report added.
Burnham Securities analyst David Healy told Reuters he believes GM’s average incentive per vehicle will end up a few hundred dollars higher in March than February which would be in line with GM’s current strategy of combining modest incentives with production cuts rather than relying on heavy incentives.
“They’ve cut production and their inventories are too high, so they need to move them out,” Healy reportedly said.
GM’s chief US competitors, Ford and Chrysler Group, told Reuters they don’t plan to match GM’s announcement.
