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GM will offer interest-free financing

By ASSOCIATED PRESS
Published June 28, 2006

DETROIT - 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 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.

GM expects to average $2,836 in incentives per vehicle this June, $1,100 less than the same month last year.

[Last modified June 28, 2006, 01:26:04]