GM sees softer second quarter sales; plans summer incentives

queryvar="gm,sees,softer,second,quarter,sales;,pla ns,summer,incentives";Automotive News / April 4, 2007 - 1:18 pm / UPDATED: 4/4/2007 4:58 P.M.

document.write ('');advertisement


NEW YORK (Reuters) -- Troy Clarke, General Motors' head of North American operations, said today he expects second-quarter sales to be softer than initially forecast due to a weaker overall industry than GM had anticipated.

Speaking on the sidelines of the New York auto show, Clarke said GM was scaling back production on some cars and mid-sized SUVs to cope with softer demand.

"We thought the market would be stronger," he said.

The U.S. auto industry is expected to be slightly weaker this year as a softer economy, high interest rates and pressures on the subprime mortgage market dampen demand for new vehicles.

GM's U.S. sales fell 4.0 percent in March, driven by big declines in sales of pickups and SUVs.

Sales of GM's Chevrolet Silverado pickup fell 8.6 percent, while GMC Sierra purchases were down 15.1 percent in March.

GM, which is in the middle of a sweeping restructuring that includes more than 34,000 job cuts and 12 plant closures, has been sticking to a strategy of lower-but-clearer pricing with few incentives as part of its turnaround.

For decades, the world's largest automaker has been known for a complicated pricing system that offered big, profit-reducing incentives.

GM's sales chief, Mark LaNeve, said today the automaker's pricing, incentive and marketing strategies have helped stabilized retail sales at a seasonally adjusted annual rate of about 3 million units.

LaNeve said GM plans to increase incentive spending on full-sized pickups in 2007.

"We look for that incentive level to rise, we hope modestly," LaNeve said. Clarke also said GM would offer summer incentives on various vehicles this year.