General Motors Corp. said Tuesday that for a short time it will offer zero percent financing for up to six years on many of its cars and trucks as it tries to clear inventory off lots in preparation for the new model year.
Company officials said the financing would be offered on Chevrolet, Buick, Pontiac and GMC models during a sale that begins Thursday and ends July 5.
The announcement heats up the incentive war between the domestic automakers, and it comes at a time when GM says its June sales likely are to be 30 percent below the same month last year, because at that time, GM was offering an employee discount promotion.
But company officials said Tuesday that they have no plan to return to employee pricing. DaimlerChrysler AG’s Chrysler Group has said it would consider a return to employee discounts for everyone, a promotion launched last June by GM that pushed sales to record numbers.
A DaimlerChrysler spokesman said no decision has been made on incentives, but an announcement would likely be made on Friday, the date the current incentives expire.
“We’re not planning on reviving employee pricing,” Mark LaNeve, GM’s vice president of vehicle sales for North America, told reporters Tuesday.
The pricing, which amounts to a 5 percent discount, would not work as well as last year and is not popular with dealers, he said.
It also would contradict GM’s strategy of trying to wean itself off incentives and increase its average sales price, LaNeve said.
“We don’t want to go to market that way,” he said, adding that GM is trying to improve its brand image so it sells great products rather than great incentives.
“We’re confident we’ve got the right strategy, and we’re gonna continue down this path,” he said.
GM expects to average $2,836 in incentives per vehicle in June of this year, $1,100 less than the same month last year.
The Chrysler Group, LaNeve said, has a huge inventory and already is offering big incentives, sometimes as much as $6,000 per vehicle. Employee pricing could actually be a worse deal than some of the company’s existing incentives, he said.
“It’s amazing for GM to say that considering who’s led us down the road of incentives for many years,” DaimlerChrysler spokesman Mike Aberlich said.
He said Chrysler, like other manufacturers, has built up an inventory of large SUVs.
GM will offer zero percent financing for 72 months on all Chevrolet, Buick, Pontiac and GMC models except for the Chevrolet Corvette, Hummer H1, medium-duty trucks, and the Pontiac Solstice and the G6 convertible, company spokesman John M. McDonald said.
In addition, GM will offer interest-free loans for up to five years on 2006 Cadillac, Saab, and Hummer models. Zero percent also will be available for 36 months on some 2007 sport utility vehicles, including the Chevrolet Tahoe, Suburban and Avalanche and the GMC Yukon and Yukon XL. Those models were introduced earlier this year