GM, Ford Raise U.S. Sales Incentives

DETROIT October 1, 2004; Reuters reported that General Motors Corp. and Ford Motor Co. launched new U.S. sales incentives on Friday as both automakers struggle with falling market share and high inventories of unsold vehicles.

GM said it would offer cash rebates of up to $6,000 on most of its 2004 sport utility vehicles and up to $2,500 on many of its 2005 pickups.

Ford raised cash rebates on some of its 2005 model-year vehicles by between $500 and $1,000 for a total of up to $2,000, but the new incentives are only scheduled to run through Monday.

Automakers typically boost incentives in early autumn to clear out older models, but one dealer said the GM incentives were particularly high.

"I think it's more aggressive than I thought they would be," one GM dealer in Michigan, who declined to be named, told Reuters. "Some of the bigger SUVs were not as hot (sellers) as everything else, so we can use that (incentive) on some of those SUVs."

Analysts expect both GM and Ford to post lackluster sales for September later on Friday. Both of the U.S. automakers offered interest-free loans for terms of up to six years on most of their vehicles during the last week of September. The incentives helped boost September sales after a slow start to the month. But Ford is still expected to report weaker sales, and GM results could be mixed to slightly higher, analysts said.

Even as incentives have climbed to spur sales, both automakers last month cut their vehicle production levels for the fourth quarter in North America.

For GM, cash rebates total up to $4,500, and its "Truckfest" incentive program adds up to $1,500 in some regions of the country to customers who finance a 2004 or 2005 pickups or SUVs through GM's finance arm GMAC.

All GM divisions are included in the new incentives except the Cadillac, Hummer and Saturn brands, GM said. The GM programs runs until Nov. 1.

Ford's new incentives cover some of its SUVs, including the Explorer and the Expedition, and its Taurus mid-size car.

Ford will decide on new incentives next week after analyzing September sales results, Reuter said.