|
GM to roll out rebates
|
 |
January 3, 2002: 10:35 a.m. ET
Weak economy, competition drive automaker to offer discounts.
|
NEW YORK (CNN/Money) - General Motors Corp. unveiled generous rebates Thursday as the world's biggest automaker seeks new ways to drive sales amid an industry price war.
GM's (GM: down $0.19 to $48.45, Research, Estimates) new campaign consists of $2,002 rebates on most of its 2002 models, not quite as steep as previous rebates, but rebates nonetheless, the company said Thursday.
The rebates apply toward the purchase or lease of any new 2001 or 2002 Chevrolet, Pontiac, GMC, Buick, Oldsmobile or Cadillac car or truck through Feb. 28.
"GM and its dealers are coming off an extremely successful marketing effort with 'Keep America Rolling' and we intend to continue our sales momentum," said Bill Lovejoy, group vice president of GM North America Vehicle Sales, Service and Marketing.
It's not yet clear whether the rebate program will completely replace the zero-percent financing the company offered in the last months of 2001.
No. 2 automaker Ford Motor Co. (F: up $0.28 to $16.50, Research, Estimates) and No. 3 DaimlerChrysler AG (DCX: up $0.98 to $44.46, Research, Estimates) are expected to follow suit, according to a report in the Wall Street Journal Thursday.
"Ford regularly offers cash-back incentive options on new vehicles as well as discounted annual percentage rates such as the zero-percent program," Ford spokeswoman Susan Krusel told CNNfn Thursday.
She added that Ford does offer up to $3,000 on 2001 vehicles and up to $1,500 on 2002 vehicles. The company has extended zero-percent financing through Jan. 14.
"After that, we will look at the market place," Krusel said.
Meanwhile, Chrysler said it continues to offer rebates on most vehicles except for its strong-selling PT Cruiser. The company has extended its zero-percent financing deals through Jan. 8, and is offering a 7-year drive-train warranty.
GM's new rebates coincide with the launch of its Cadillac division's CTS, a new model for the 2003 production year. The CTS starts at about $30,000 and could cost more than $40,000 fully loaded, according to the Cadillac Web site.
|
|
|
Cadillac is introducing the CTS with a base price of $30,000 (From General Motors) | |
The latest round in the price wars also comes the same day that Detroit's Big Three are set to report sales for December. The Briefing.com consensus expects the annual rate to have declined to 5.8 million from 6.3 million in November, when zero-percent financing incentives were more widespread.
Automakers scrambled to prop up sales last year with the zero-percent offers. The ploy worked, but the automakers and the Wall Street analysts who follow them have said the steep discounts would hurt profits as well as future sales.
It's that concern of a hesitant consumer in a weak economy that's driving the new rebate program.
Cruise auto stocks here
Executives at Detroit's Big Three have talked about scaling back the industry's rebate wars. But GM's new program illustrates the cold reality that without such offers, sales could plunge in the face of a weak economy and overseas competition. 
|
|
|
|
|
|
|
