General Motors Corp. today announced new incentives on its 1999 cars and trucks, including a rebate on its second-best-selling car and coupons for its highly profitable large sport-utility vehicles.
To boost sluggish sales on its large sport-utilities, GM launched a new incentive program -- instant value certificates that give consumers a discount on the price of a new vehicle. It also offered $1,000 cash back on the popular Pontiac Grand Am.
Ford Motor Co. said today that it was holding the line on average prices for its 2000 models, the third year in a row the automaker has left prices mostly unchanged on a comparably equipped basis. Ford, the world's No. 2 automaker, said a 0.6 percent decline in model year 2000 car prices would offset a 0.3 percent boost in pickup trucks, sport-utilities and minivans.
Earlier in the day, DaimlerChrysler AG said average U.S. prices would rise 0.4 percent for its American brands -- Chrysler, Dodge, Jeep and Plymouth -- for the 2000 model year.
General Motors declined to disclose any change in average prices, following company policy.
The price actions maintain the strategy of Detroit's Big 3 automakers over the last three years of keeping price increases to a minimum as they duel with low-cost imports for U.S. market share.
"The market won't let you raise prices," said Jim Hall, an analyst at industry consultant AutoPacific. "Those times are gone."
Although GM did not disclose its average prices for the 2000 model year, its rebate announcement signals a slowdown in sales of its largest sport-utility vehicles. GM customers who ask dealers for the certificates will receive $1,500 off the price of the 1999 Chevrolet and GMC Suburban and the Cadillac Escalade. Certificates of $1,000 are offered on the 1999 Chevrolet Tahoe, GMC Yukon and GMC Denali sport-utilities. GM also stepped up incentives on many of its pickup trucks.
"For the last few months, sales have been slowing," said Wes Brown, an analyst with Nextrend. "The full-size sport-utility segment is a huge segment that is based purely on image. Fashion changes quickly . . . and I think the segment has peaked a little bit."
The Suburban, Tahoe and Yukons are to be redesigned and launched later this year, but Ford will beat GM to the punch with the introduction next month of the enormous Excursion. At slightly more than 19 feet long, the Excursion is 11 inches longer than the Suburban.
A Ford official said he believes the company's incentives are competitive with GM's.
"We'll continue to monitor sales. We've been very pleased with the sales of SUVs," said Lloyd Hansen, controller of Ford's worldwide sales operation.