GM Increases Financing Incentives On Mid-Size SUVs

DETROIT, Feb 25, 2003; Reuters reported that General Motors Corp. extended zero-percent financing offers on three of its popular mid-size sport utility vehicles, to five-year terms from three years, to try to boost sales, a spokesman said on Tuesday.

GM began offering the extended interest-free loans on its Chevrolet TrailBlazer, GMC Envoy and Oldsmobile Bravada mid-size SUVs on Saturday, said GM spokesman Jeff Roegner. The program expires at the end of the month.

GM had previously offered a 1.9 percent financing rate on the SUVs for four-year loans, and 2.9 percent for five-year loans.

Some analysts said that, given the short duration of the program, dealers will have little time the advertise the new incentives. But GM dealers said they could call their customers and alert them to the offer.

GM's sales of its SUVs slumped in January after strong results in December, and many analysts expect GM's sales to fall moderately in February. Automakers are due to report their February sales on March 3.

GM's new incentives follow an offer from the Chrysler arm of DaimlerChrysler AG, which extended interest-free financing on its Jeep Grand Cherokee mid-size SUV to five years from three-year terms last week. Chrysler has also been offering zero percent financing for up to five years on its Dodge Durango mid-size SUV since Jan. 7.

Ford Motor Co. said it would not take any immediate steps to match its rivals' offers.

Analysts have said that Detroit's sales incentives appear to be losing their punch. Last year, GM successfully used incentives to boost both its market share and profit.

U.S. consumer confidence fell in February to its weakest level in 10 years, according to a report released on Tuesday by the Conference Board, a private business research group, due to tensions with Iraq, rising energy prices and the weak economy. Those factors have also weighed on new vehicle sales, analysts said.