GM Announces 0% For 5 Years Of Financing

DETROIT March 31, 2003; General Motors Corp. , faced with sluggish sales and bloated inventories, announced what it called "the most sweeping offer in its history" - - 0% financing for up to five years on nearly every vehicle it sells, The Wall Street Journal reported.

GM's latest offer, which runs through April 30, is even more generous than the then-unprecedented deals GM rolled out to jump-start sales in the wake of the Sept. 11, 2001, terrorist attacks. That offer, rapidly matched by competitors, helped drive sales to record levels and sustained consumer spending, even as it ate into auto makers' profits.

GM also is counting on the deals, which it is calling "Zero to Sixty" and will promote in television, print and internet advertising, to help boost its market share, which fell to 27% in the first two months of the year from 29.2% a year earlier. GM announced the offer late yesterday, but competitors are likely to respond within the next few days. A Ford Motor Co. spokesman said, "We'll be competitive in the marketplace." GM and other auto makers report March sales results today. With inventories well above normal levels, GM and other major auto makers have announced plans to cut second-quarter production.

GM's discount deals since Sept. 11, 2001, have helped GM rebuild its market share after more than a decade of declines and generate cash it needs to rebuild the value of its pension fund, which has shrunken with declining stock prices in recent years. GM has been pushing a range of discounts and other deals to help sustain sales over the months since the terrorist attacks.