GM to Offer 7.9% Financing, Dealers Say

General Motors, concerned by the softening in domestic car sales, plans to begin a major new sales incentive campaign this week, GM dealers confirmed Monday.

GM refused to comment but dealers said that GM would be offering 7.9% discount financing for a wide range of new models. The program is expected to run from Thursday until some time in February, dealers said.

GM’s sales have been weak ever since early October, when it ended its widespread offer of 7.7% discount financing on most of its new cars. In November, for example, GM’s sales were off 10.5% from the year before.

The company recently began a more modest incentive campaign on subcompact models, but a big buildup in its inventories of unsold cars is forcing the auto maker to expand its promotional efforts. Dealers said the new program apparently will cover many of GM’s intermediate and large models, such as the Oldsmobile Cutlass Ciera and Cutlass Supreme, in addition to GM’s smaller cars.

Most of Pontiac Line

One Pontiac dealer, for instance, said he has been told the program will cover the bulk of Pontiac’s lineup: the Sunbird, Fiero, Grand Prix, Bonneville and four-cylinder 6000 models. A Buick dealer added that the low-interest financing will also be offered on Buick’s four-cylinder Century, the new Somerset Regal and Skylark models.

Dealers around the country agreed Monday that GM must do something quickly to help pull them out of the doldrums.

“It would definitely help spur sales,” said Tom Giusto, sales manager for Jim Weston Pontiac-Buick-GMC in Gresham, Ore. “There are a lot of people who have been sitting on the sidelines waiting for another round of incentives before they buy.”

But others would rather see real price cuts, instead of promotional gimmicks that don’t lure customers away from the imports. “I don’t think we steal sales away from the competition with incentives,” said Rex Morgan, new car sales manager at Mossy Oldsmobile in Houston.

“And all the domestic companies offer the same rebates, so it doesn’t make much difference,” he added. “All we do is take buyers who otherwise would have waited a month or two and move them into another time frame. I’ve asked them (GM officials) what would happen if they tried just cutting prices by 5% instead, but they just say they can’t do that.”