Monday, February 26, 2007

'Positive response' prompts GM to extend incentive campaign

Thursday, February 22, 2007
'Positive response' prompts GM to extend incentive campaign
Company adds Saturn Vue hybrid-electric vehicle to the discount program that runs through Feb. 28.
John D. Stoll / Dow Jones Newswires

DETROIT -- General Motors Corp. has extended until the end of February an incentive campaign as it works to recover from disappointing retail sales in January.

It is now including the Saturn Vue hybrid-electric vehicle in the discount program that was originally to end Tuesday.

The automaker will continue offering zero percent loans spanning as long as 60 months on vehicles and $500 cash back on certain vehicles.

The deals were initially offered under GM's annual Presidents Day sale.

They have been extended to Feb. 28 because GM has seen "a real positive response to the offers," GM spokesman John McDonald said in an interview.

McDonald said the company is now discounting its relatively new hybrid, known as the "Green Line" version, for "simplicity's sake."

He said some dealers had only hybrid versions of the Saturn Vue in stock, but were unable to give discounts on that vehicle.

GM sells relatively few hybrid vehicles in the United States but has plans to ramp up volume this year with new product offerings.

McDonald said GM's closely watched February incentive spending levels are about even with the same period in 2006. McDonald said the company is "getting the right balance" when it comes to discounting vehicles without losing too much margin in the process.

GM has said its 14-month drive to cut incentive spending has been successful. The initiative is designed to boost profit margins and increase the resale values of the company's vehicles.

In a conference call Wednesday with analysts and media, Earl Hesterberg, Group 1 Automotive Inc. chief executive, said GM's January sales were lackluster but that February discounts should inspire demand.

Group 1 is among the larger auto dealership groups in the United States.

GM will also offer a "March Madness" campaign that coincides with the national college basketball tournament that starts next month.

GM's retail sales, excluding deliveries to fleet customers, fell 8 percent in January. Top executives have characterized the performance as disappointing and pointed to the company's restraint on January incentives as a reason for the unexpected decline.

© Copyright 2007 The Detroit News. All rights reserved.


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