DETROIT: The inexorable rise in US gasoline prices is forcing automakers to revisit incentive schemes as they try to entice reluctant customers to dealer lots.
With the overall numbers of sales rapidly heading south - June figures are running at a scarily low annualized rate of 12.5 million vehicles – General Motors is close to losing its crown as the biggest US car seller to Japanese arch-rival Toyota Motor.
In a bid to head off the threat and help dealers shift gas-guzzling SUVs and pick-up trucks, GM is offering zero-percent loans for up to 72 months or cash rebates of up to $7,000 (€4,999; £3,560).
Comments top marketing executive for North America, Mark LaNeve: "Zero percent seems to work. A lot of customers are out of equity, and zero percent helps [with] that issue."
The promotions could spur rivals Ford Motor Company and Chrysler Group to offer similar deals, although both companies say they have no plans at present.
While GM struggles to sell its 2008 inventory, Toyota is gaining US market share with its passenger cars. It hit a high of 18.6% in May, less than one percentage point behind the US giant.
But it too faces problems with ridding itself of a backlog of light trucks and SUVs and may be forced to play the incentives game.
Data sourced from Wall Street Journal Online; additional content by WARC staff