December 9, 2004 in Business

GM boosts incentives after poor November

Associated Press

DETROIT — General Motors Corp., coming off a disappointing November sales period and battling to regain U.S. market share, will launch a new promotion Friday that includes cash bonuses on many new models in addition to incentives already available.

Ford Motor Co., the nation’s second-largest automaker behind GM whose sales also slumped in November, said it had no plans to match GM’s enhanced offers. No. 3 Chrysler, the surging American arm of DaimlerChrysler AG, also reported no immediate intentions to change its marketing strategy from November.

GM wouldn’t confirm the new marketing program Wednesday, but dealers say they’ve been notified of the December “red tag” sale, which will include bonus cash of $500 to $2,500 for customers who finance their purchases through GMAC, GM’s finance arm.

The promotion runs through Jan. 3.

GM’s latest push to spur sales was widely expected after business fell 13 percent last month and its U.S. market share sank to one of its lowest points on record at 24.8 percent. GM actually scaled back incentives in November — from an average of $4,051 per vehicle in October to $3,747, according to Autodata Corp. — and analysts say that likely contributed to the decline.

“GM’s share performance has been disappointing this year and was significantly weaker than normal in November on the incentive pullback,” Credit Suisse First Boston analyst Chris Ceraso said in a research report. “We can see this relationship for the Big 3 in general, where share has been more disappointing in the months where incentives have declined.”

Ceraso noted that incentives normally rise in November as the hoopla surrounding new-model introductions begins to wane, but several later-than-usual launches from GM and Ford likely upset the typical pattern.

Ford also lowered its average outlay per vehicle last month — from $3,425 in October to $3,206 — while Chrysler upped its spending slightly, from $3,539 in October to $3,546, Autodata reported.

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