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Automakers enhancing incentives

Associated Press

DETROIT — After pulling back on consumer incentives last month and posting generally lackluster results, Detroit’s Big Three automakers are beefing up offerings in hopes of giving a boost to the critical spring selling season.

General Motors Corp., whose business rose less than 1 percent last month, well below forecasts, became the latest to tweak its deals when it added new incentives last week to midsize sport utility vehicles.

The new program includes $1,000 cash back plus zero percent financing on loans of up to five years on models such as the Chevrolet TrailBlazer and GMC Envoy. The deal can be combined with a previous $1,000 “bonus cash” promotion.

GM’s new offer comes after rivals Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group both added new incentives on some of their SUVs.

Industrywide, average incentives were slightly lower in April than in March, the first sequential March-to-April decline since 2000, Merrill Lynch analyst John Casesa noted in a research report Thursday.

The average Big Three incentive fell $72, or 1.8 percent, to $3,961 a vehicle in April, according to Autodata Corp. Asian manufacturers lowered incentives by an average of $26 to $1,406, while European brands lifted incentives by $13 to $2,267.

Analysts say the pullback likely contributed to the slight 0.8 percent gain in U.S. sales last month. Some had forecast an increase of up to 5 percent, based on the economic recovery and the tax-refund season.

“We think automakers were testing the hypothesis that the economy may now be strong enough to support an acceptable level of demand with a lower level of incentives,” Credit Suisse First Boston analyst Chris Ceraso said.

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