General Motors on Tuesday extended US market hefty cash rebates and interest-free loans on most of its vehicles until July 31, continuing its push for sales in a weak market, Reuters reported.
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The news agency noted that GM has been offering rebates of up to $US4,000 and interest-free loans for up to five years for much of the summer. Under the programme announced on Tuesday, GM reduced rebates on a few models but launched deals on 2004 vehicles with rebates of up to $1,500, the report added.
Reuters noted that GM has led the US motor industry in sales incentives and discounts since late 2001 in an effort to bolster sales after the September 11 attacks on the United States.
Executives at Detroit’s Big Three car makers, who acknowledge that incentives are destroying pricing power and profits, had hoped to scale back on the givebacks once the US economy had turned around, Reuters added. However, the report said, the economy has yet to exhibit sustainable growth, as the Federal Reserve noted when it cut US interest rates to 45-year lows late last month.
Vehicle sales, while still resilient, have slowed from stronger levels at the end of 2002 amid the weak labour market and general economic uncertainty, Reuters said, adding that another factor is “incentive burnout,” a term that refers to the fact that Big Three incentives are now taken for granted by many consumers and fail to draw them into showrooms.
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By GlobalDataReuters said that, last month, GM’s average per-vehicle incentive hit $3,934, a 51% increase over June 2002 and the highest average among large car makers. Despite the generous discounts, GM’s inventories were about 21% above normal at the end of June, the report added.
GM’s incentives in detail:
$US4,000 cash on Chevrolet Cavalier, S10, Tracker and Avalanche; GMC Sonoma, Oldsmobile Alero; Pontiac Sunfire.
$2,000 cash on Chevrolet Corvette, Pontiac Vibe and Saturn VUE and ION.
$3,000 on all other Buick Chevrolet, GMC, Oldsmobile, Pontiac and Saturn passenger cars and trucks.
2003 Model Year Vehicles Finance Rates:
0.0/0.0/0.0/1.9 36/48/60/72
Buick, Chevrolet (excluding Corvette), GMC, Oldsmobile,
Pontiac, Saturn
0.0/0.0/0.0 36/48/60
Cadillac Deville, Cadillac Escalade, ESV and EXT, Cadillac SLS, Cadillac STS, Saab
0.0/2.9/3.9 36/48/60
Chevrolet Corvette
5.9/5.9/5.9 36/48/60
Cadillac CTS
2004 Model Year Vehicles:
$1,000 on Chevrolet Blazer, TrailBlazer, S-10, Venture; GMC Envoy, Sonoma Crew Cab; Oldsmobile Bravada, Silhouette; Pontiac Grand Prix, Montana, Vibe
$1,500 on 2004 Buick Century, LeSabre, Park Avenue, Regal, Rendezvous; Chevrolet Cavalier (select models), Impala, Monte Carlo; Pontiac Aztek, Grand Am, Sunfire (select models); Oldsmobile Alero
