General Motors has rejoined the incentives war with rival automakers as domestic sales continue to sag. Zero-percent financing for six years now leads GM's sales offering, hot on the heels of Chrysler Group which is reportedly ready to unveil a return to an employee discount scheme [WAMN: 26-Jun-06] as it tries to shift last year's models from dealer lots.

GM had vowed to wean itself off special offers in favour of lower sticker prices but, says vp of North American sales and marketing Mark LaNeve: "We're not going to put our dealers in a position where they can't be aggressive merchandisers."

The company has warned that sales figures for June and July are "not going to be a picnic", with the numbers for June predicted to take a 30% fall on the same month last year. However, GM's 2005 figures were inflated to a 19-year summer high by its own 'employee discount' offer.

The company has also announced that 35,000 of its employees have taken up the offer to leave the business, allowing it to save $8 billion (€6.36bn; £4.39bn) in annual spending and cut its workforce two years earlier than scheduled.

Meanwhile, DaimlerChrysler ceo Dieter Zetsche has arrived in the US from the company's German HQ to promote the transatlantic launch of the automaker's still-to-turn-a-profit Smart city car.

Data sourced from Financial Times Online; additional content by WARC staff