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Automakers add new SUV incentives

General Motors Corp. on Thursday added new incentives on its midsize sport utility vehicles following new offers by competitors and weaker-than-expected U.S. sales in April.
/ Source: Reuters

General Motors Corp. on Thursday added new incentives on its midsize sport utility vehicles following new offers by competitors and weaker-than-expected U.S. sales in April.

GM’s new incentives include $1,000 cash back plus zero percent financing for loans of up to five years, which can be combined with a previous $1,000 “bonus cash” program. Consumers who forego the loan offer can choose to take cash rebates of up to $4,500 on many SUVs, pickups and minivans, which includes the $1,000 “bonus cash.”

GM’s sales in April rose less than 1 percent, far below the the 4 percent to 5 percent gain that some Wall Street analysts had expected, despite its “Truckfest” incentive program on SUVs, minivans and pickups launched last month.

However, GM said “Truckfest”, which runs through June 1, helped boost sales of midsize SUVs by about 4 percent in April.

“We made this modification because our April sales reflected that Truckfest has played very well with consumers interested in [mid-size SUVs],” a GM spokeswoman said.

Ford Motor Co. on Wednesday modified its incentives, offering a cash rebate of $3,000, or $2,000 and interest-free loans for up to five years, on its Explorer, Expedition and Excursion SUVs and the Freestar minivan.

The Chrysler side of DaimlerChrysler AG also rolled out new incentives on its Dodge Durango SUV, offering $3,500 cash back, a Chrysler spokesman said.

The auto industry reduced U.S. incentives slightly in April and paid the cost with weaker-than-expected sales results.  Incentives across the industry averaged $2,994 per vehicle in April, down from $3,029 in March, according to industry research firm Autodata.

That led analysts to conclude that the industry would ratchet up incentives in May and June, to help clear out inventories and prevent automakers from being forced to curtail production.