General Motors Co. has started a promotion earlier this month that entices current lease holders to buy a new car and have the last three payments on existing leases waived. GM is also adding an incentive to deals that exceeded offers made by rivals.
GM said that the promotion is valid on most models with leases that expire between now and Aug. 31. Researcher Autodata Corp. said that GM raised incentive spending in January by 16% to an average of $3,663 per vehicle, the highest among major automakers. GM's U.S. sales went up by 22% last month, doing better than the industry's 16% gain.
In a video presentation for GM’s initial public offering in November, the company said that it aimed to offer fewer incentives that cut margins and gave off the impression that price is the main selling point for GM vehicles. Jessica Caldwell, an analyst at Edmunds, said that early-return leasing deals may conflict with that pledge and so she hopes that GM won’t push through with it.
During the company's monthly sales conference call with analysts and reporters, Don Johnson, GM's vice president of U.S. sales, said that the company will start discussing incentives “directionally” instead of providing specific data on a month-to-month basis.
In an interview this week at the Chicago auto show, Rick Scheidt, GM's vice president of Chevrolet marketing, said that he has not seen any internal behavior “that suggests we have gone back to old ways.” Scheidt added that it isn’t the time to go back to bad habits, especially since the company knows that “everybody’s watching.” [via autonews - sub. required]