GM pushes incentives to boost sales

Will incentives to buy come back to haunt American automakers?

By Guy Gordon - Reporter/Anchor

SOUTHFIELD, Mich. - New car and truck demand isn't melting, but neither is the ice and snow keeping customers from dealerships.

So GM, among others, is jumpstarting spring by heating up incentives.

Chevrolet is punching the gas on its new trucks with supplier pricing discounts of $7,000 or more. Serra Chevrolet in Southfield is offering $2,000 above any trade-in and $500 off employee pricing. It's already helping.

"The amount of people coming in looking at the vehicles, purchasing the vehicles, making decisions, it has almost doubled what it was previous in the beginning of February," said Jeremy Dixon, a new car manager at Serra Chevrolet.

It's not just GM. TrueCar is predicting average incentive levels for all automakers will rise 5 percent from February to a 3-year high of more than $2,600 per vehicle with the Detroit Three above $3,000 a ride.

GM is getting $4,000-$5,000 more on each truck it sells compared to the prior generation of Silverado, but analysts still worry GM could be resuming an addiction to discounts which was a factor in its financial troubles.

"It can come back to haunt you. It can help your sales in the short term but it reduces profitibility. It's not the best way to increase sales," said Stephanie Brinley, an IHS Automotive analyst.

Dealers hope to clear the inventory by June. If they don't we could see production slow-downs, and that's not a good deal for anybody.

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