Detroit – The pickup discount fight escalated 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 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 pickups.
The offers vary by region, with the most generous deals in the north-central and northeastern parts of the country. They run from today 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 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 automotive website.
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, also is offering low-interest financing and rebates, 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 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.
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 2006, when the company offered a 72-hour sale.
