GM adds deals after weak Jan.

GM adds deals after weak Jan.

With zero-percent loans, cash, automaker hopes to boost sales

Sharon Terlep / The Detroit News

For the Midwest and Northeast:

$500 bonus cash on most 2006-07 GM cars and trucks

Excludes Pontiac Solstice, Saturn Sky, Chevrolet Corvette Z06, Saturn Vue Hybrid, medium-duty trucks and all of the Hummer, Cadillac and Saab lineups.

Free financing for 36 months on most 2006-07 vehicles

Free financing for 60 months on certain vehicles, including the Chevrolet Malibu, Saturn Vue, Buick Lucerne and Pontiac Grand Prix

Excludes Pontiac Solstice, Saturn Sky, Chevrolet Corvette Z06, Saturn Vue Hybrid, medium-duty trucks and all of the Hummer, Cadillac and Saab lineups

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General Motors Corp. is expected to roll out a ramped-up incentive program today that will include bonus cash and a revival of free financing.

Zero-percent financing for as long as 60 months or $500 cash will be available on most 2006 and 2007 models as GM hopes to boost sales following a nearly 17 percent decline in demand last month.

The cash will be offered in the Midwest and Northeast, while zero-percent loans will be available everywhere else in the United States.

"It's a new thing that kind of caught us off guard," said dealer John Rogan of John Rogan Buick-Livonia. "It's a great deal. And, as dealers, we believe it will drive our market share up."

GM has made a concerted effort to pare back costly incentive spending, a strategy the automaker has said it will stick to even at the risk of losing sales. GM attributed its January sales decline in part to a planned reduction in rental fleet sales, but consumer demand also slumped.

After taking such a steep sales hit in January, some questioned whether GM pulled back too far on incentives.

"We're not going to go down the path we went down before, throwing incentive dollar after incentive dollar," GM senior analyst Paul Ballew said after announcing January sales figures early this month. "But we'll do what it takes to be competitive."

GM spokesman John McDonald said the new incentives, which expire Feb. 20, don't reflect a reversal of GM's strategy to cut back on deals and discounts, but are a bid to keep customers coming into showrooms during a traditionally slow sales month.

"The strategy is the same," he said. "We had planned to do this prior to the January results."

GM's incentives in January were at their lowest level since 2002 and, at an average $2,365, were lower than DaimlerChrysler AG's Chrysler Group at $3,853 and Ford Motor Co. at $3,502.

The new incentives exclude Cadillac, Hummer and Saab brand models as well as other select vehicles, such as the Chevrolet Corvette Z06 and medium-duty trucks. The zero-percent financing is available for three or five years, depending on the vehicle. The free financing will be available in the Midwest and Northeast only for 2006 and 2007 model year GMC Sierra and Chevrolet Silverado pickups.

Advertising will be done on a regional level and by the individual brands, McDonald said.

GM was smart to avoid a major national blitz, which would have created the impression that the automaker was going back on its less-is-better strategy on incentives, said Tom Libby, an analyst with J.D. Power and Associates' Power Information Network.

Even though GM lost some sales, the company is right to keep its discounts low, since deep discounts erode brand values and drive down resale values, he said.

"It sounds like a significant program," Libby said. "But it's not a humungous, pull-out-all-the-stops program. If it is, they would be getting away from their strategy