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Monday October 2, 4:51 pm Eastern Time
GM's Oldsmobile starts new zero-down incentive plan
By Todd Nissen
DETROIT, Oct 2 (Reuters) - General Motors Corp.'s (NYSE:GM - news) Oldsmobile unit on Monday announced a company-first incentive of no down payment, no monthly payments and no interest for a year as several automakers prepared to revise their rebates for a year-end sales push.
Oldsmobile said the national deferred payment purchase programme will apply to outgoing 2000 model year vehicles, as well as 2001 models. The programme starts Tuesday and runs through January 2.
The unusual incentive -- only one other automaker now offers such a programme -- comes as GM, Ford Motor Co. (NYSE:F - news) and DaimlerChrysler AG (NYSE:DCX - news) said they would advise dealers about programmes for the fourth quarter on Tuesday.
Current national incentive programmes for the Big 3 U.S. automakers expire Monday. Representatives from each of the automakers declined to comment on the new incentives until dealers have been told.
Industry incentives in August, the last month for which complete figures are available, were up 1.4 percent from a year ago. Analysts expect them to generally creep up for the last quarter of the year as automakers try to keep demand high amid rising interest rates and an expected overall sales slow-down.
``The traditional Big 3 have been losing market share all year long to the imports,'' said Bill Seltenheim, vice president at Autodata Corp., an industry consulting firm. ``I would anticipate higher spending.''
GM's share through August of this year was 28.5 percent, down from 29.6 percent. Ford's fell to 24.6 percent from 24.8 percent. DaimlerChrysler ended the first eight months with 15.6 percent, off from 16.9 percent.
Meantime, Toyota Motor Corp. , Honda Motor Co. Ltd. , Nissan Motor Co. , as well as Korean and German automakers have also boosted their share of the U.S. market.
The new Oldsmobile incentives come as the division struggles to carve out a distinct identity with new products. Sales so far this year are down 20.7 percent to 202,001 vehicles.
Oldsmobile sells the Alero coupe and sedan, Aurora and Intrigue mid-size sedans, Bravada sport utility vehicle and Silhouette minivan.
A test programme in four cities showed a 34 percent sales increase from the zero-down programme, although only 19 percent of customers opted for the zero-down plan. People who chose the programme are not able to take advantage of other national and regional programmes that offer rebates of at least $2,500 on some vehicles and interest rates of 3.9 percent.
Oldsmobile also said residents of Maine, Pennsylvania and the District of Columbia are not eligible.
The only other automaker to offer a similar zero-down programme is Japan's Mitsubishi Motors Corp. .
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