DETROIT - GM, seeking to boost sales of SUVs after poor results last month, is offering its U.S. dealers as much as $1,000 on each SUV they sell over their sales target, dealers familiar with the plans said on Friday.
Sales of many of GM's most profitable SUVs, including the Cadillac Escalade, Chevrolet Suburban and GMC Yukon XL, fell more than 30 percent in January due to new offerings from competitors and buyer fatigue from GM's all-out sales push in December.
The deal, which runs through the end of February, also includes the Cadillac Escalade ESV, a new large SUV that went on sale last month, and the Cadillac Escalade EXT, a luxury pickup.
"We immediately thought of a customer that was just on the fence, and now were able to offer them a deal," one Wisconsin dealer said.
In an attempt to sell more vehicles in the first half of the month, all of the SUV sales between now and Feb. 12 will be doubled when applied to the sales targets, they said. Dealers are free to use the cash as they wish, offering it customers or keeping it for profits.
GM declined to comment on the incentives.
"We'll fine tune as necessary to stay competitive," Ford spokesman Jim Cain said when asked if Ford would match the GM deal. "We have great momentum that we want to maintain and we did a good job in improving our market share in January."
One Los Angeles dealer said the GM incentives should help boost sales, but a return of 0 percent financing on five-year loans would help more. "If GM put 0 percent for 60 months back on the SUVs, it would be insane around here," he said.
GM's strong SUV sales have powered its two consecutive years of higher market share and stronger earnings, which have grown thanks to cost-cutting initiatives despite the high costs of its aggressive incentives.
But last month, GM's sales of SUVs, pickups and minivans fell nearly 19 percent, partly due to a let-down after exceptionally strong sales in December. GM's supplies of unsold trucks soared last month to more than 100 days' supply.
Meanwhile, many of its competitors have come out with new SUVs in the last few months, such as the Lincoln Navigator, the Volvo XC90 and the Ford Expedition from Ford Motor Co., and the Lexus GX470 from Toyota Motor Corp.
Nissan Motor Co. Ltd. will enter the market for full-size SUVs for the first time later this year, and has just begun selling its Infiniti FX45 luxury SUV.
Late last month, GM and Ford added $500 in consumer cash rebates to many of their SUVs, pickups and vans.