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News // Autos

Limited Effectiveness Of GM

05 May 2003 , 09:58547
Vehicle financing incentives at General Motors may reach the limit of their effectiveness.

Sales of GM vehicles, excluding its Saab division, fell 8.9% in April in spite of what it described as its most aggressive incentive programme ever.

However, despite increasing its US market share in the past two years, the carmaker has lost some ground in recent months.

The company has been struggling within six years with negative net vehicle pricing - that is, inability to raise prices fast enough to more than offset rising costs.

It is also battling rising pension and retiree healthcare costs, as well as aggressive moves by Japanese and European carmakers into the highly profitable sport utility and pick-up truck sectors.

The company needs the Bush administration's tax cut package to stimulate a US economic recovery.

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