The pickup truck discount fight escalated on Monday as General Motors Corp. announced increased rebates and more low-interest financing options in an effort to boost sales that sagged in June.
GM, which has been trying to reduce incentives and raise purchase prices closer to the sticker, announced that it would offer up to $2,000 in cash discounts or financing from zero percent to 4.9 percent on regular-cab models of its Chevrolet Silverado and GMC Sierra pickup trucks.
The offers vary by region, with the most generous deals in the North Central and Northeastern parts of the country. They run from Tuesday through July 31, GM said in a statement.
Previously the company offered low-rate financing or $1,000 in cash discounts on the pickups, said GM spokesman John McDonald. GM is offering even higher incentives on extended and crew cab pickup models.
For other models, GM will roll most of the incentives offered in the second quarter into the third quarter, with some minor changes based on models and regions, the company said.
The pickup truck discounts are designed to come closer to GM's competitors including Toyota Motor Corp., which last month bumped incentives on its new full-sized Tundra to an average of just over $5,000, according to the Edmunds.com automotive Web site.
GM had about $3,600 worth of incentives last month on the Silverado and Sierra including some cash to dealers that can be passed on to buyers, Edmunds said. Its total incentives last month were among the lowest in the pickup category, Edmunds said.
As a result, Silverado and Sierra sales dropped more than 20 percent compared with the same month last year, while Tundra sales leaped by 146.3 percent.
“They had to do something with cash on the hood … after the horrible June that they had,” said Alex Rosten, an industry analyst with Edmunds.
The GM incentives, he said, may not be enough to boost sales significantly, and the company may have to come back with more later in July or in August, he said. Ford, he said, is offering low interest financing and rebates, far bigger discounts than GM, Rosten said.
Rosten said GM is likely taking baby steps in its incentives as it tries to be more disciplined about using them. He also said he expects competitors to boost incentives as pickup truck competition heats up later in the year.
McDonald would not say whether the new round of incentives were designed to counter Toyota's increases, but Paul Ballew, GM's executive director of global market and industry analysis, said last week that GM would consider increases because it did not want to cede ground in pickup sales.
Led by the pickup sales drop, GM's overall sales tumbled 21.3 percent last month. GM blamed the decline on a planned reduction in low-profit fleet sales and a tough comparison with June of last year, when the company offered a major 72-hour sale.
But company officials also said they were surprised by the level of incentives on the Tundra, something uncharacteristic of Toyota.
According to Edmunds, Toyota's incentives ranked second only to the Dodge Ram, which had about $6,800 in discounts to lure buyers. Chrysler Group officials said they had no plans at present to further increase incentives.
Toyota officials said last week that they expect to reach a goal of selling 200,000 Tundras this year. They also said they may respond with more incentives depending on what happens in the marketplace.
Ford, whose F-Series pickup is the No. 1-selling vehicle in the U.S., announced Monday that it would extend its end-of-the-model-year clearance incentives on 2007 truck and SUV models until Aug. 31.
Customers had been offered 36-month, zero percent financing and $2,007 bonus cash on all 2007 trucks and SUVs in an offer that expired Monday. The Ford Edge, Ford Freestyle and Lincoln MKX crossovers, and Ford E-Series vans are not eligible.
Several 2007 models are eligible for rebates of $500 to $2,500 instead of zero-percent financing.
The company in June offered nearly $4,300 on its F-150 pickups, according to Edmunds.
F-Series sales were off 0.5 percent last month.
Industrywide U.S. sales in June fell 3 percent to 1.46 million from 1.5 million in June 2006, according to Autodata Corp. For the first half of the year, sales dropped 1.5 percent, to 8.25 million vehicles from 8.37 million during the same period last year.
