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DETROIT -- In an effort to boost lagging sales, General Motors Corp. today announced a new incentives program of "Red Tag" prices on 2005- and 2006-model cars and light trucks through Jan. 3.
GM has been suffering billion-dollar losses and a declining North American market share. Its U.S. sales fell about 23 percent in October from one year earlier, while they fell about 11 percent industrywide.
Under the new incentives, dealers will post fixed maximum prices on vehicles. They cover most models of the Buick, Chevrolet, GMC and Pontiac nameplates and knock from several hundred to $4,400 or more off the list price of its models, GM said.
The GM announcement can be expected to trigger a new round of price cuts across the car industry, even by Asian producers that have been gaining market share at the expense of the U.S. Big Three, said analyst Noriaki Hirakata of Morgan Stanley in Tokyo.
"Japanese -- they hate incentives, but they will have to respond," Hirakata said. "Generally, the selling price of light trucks will be under pressure."
GM reported a net loss of $1.6 billion in the third quarter, compared with net income of $315 million a year ago, as its North American division continued to suffer from high health care costs and falling sales of sport utility vehicles.
The automaker's North American market share fell to 25.6 percent in the third quarter from 28.5 percent a year ago. Through the first nine months of this year, GM's market share was 26.1 percent, down from 27 percent in 2004.
The new round of incentives "combines the best features of the recent 'GM Employee Discount for Everyone' program and last December's 'Red Tag' program," GM said in a statement.
GM said the red tag prices are "consistent across the country," exclusive of taxes, title costs and dealer fees.
As examples of the new prices for 2006 models, the tag price for the GMC Envoy two-wheel drive SLE 3SA sport utility vehicle would be $4,442 below its previous sticker price, GM said on its Web site.
Among cars, the tag price of the Buick LaCrosse CX car would drop $3,019, while that for the base-model Pontiac Vibe car would fall $692 from the sticker price.
The company announced other incentives for its Cadillac, Saturn, Saab and Hummer nameplates. It said Cadillac, Saturn and Saab will offer $500 rebates, while Hummer will have special pricing for a rear entertainment system.
GM has been suffering billion-dollar losses and a declining North American market share. Its U.S. sales fell about 23 percent in October from one year earlier, while they fell about 11 percent industrywide.
Under the new incentives, dealers will post fixed maximum prices on vehicles. They cover most models of the Buick, Chevrolet, GMC and Pontiac nameplates and knock from several hundred to $4,400 or more off the list price of its models, GM said.
The GM announcement can be expected to trigger a new round of price cuts across the car industry, even by Asian producers that have been gaining market share at the expense of the U.S. Big Three, said analyst Noriaki Hirakata of Morgan Stanley in Tokyo.
"Japanese -- they hate incentives, but they will have to respond," Hirakata said. "Generally, the selling price of light trucks will be under pressure."
GM reported a net loss of $1.6 billion in the third quarter, compared with net income of $315 million a year ago, as its North American division continued to suffer from high health care costs and falling sales of sport utility vehicles.
The automaker's North American market share fell to 25.6 percent in the third quarter from 28.5 percent a year ago. Through the first nine months of this year, GM's market share was 26.1 percent, down from 27 percent in 2004.
The new round of incentives "combines the best features of the recent 'GM Employee Discount for Everyone' program and last December's 'Red Tag' program," GM said in a statement.
GM said the red tag prices are "consistent across the country," exclusive of taxes, title costs and dealer fees.
As examples of the new prices for 2006 models, the tag price for the GMC Envoy two-wheel drive SLE 3SA sport utility vehicle would be $4,442 below its previous sticker price, GM said on its Web site.
Among cars, the tag price of the Buick LaCrosse CX car would drop $3,019, while that for the base-model Pontiac Vibe car would fall $692 from the sticker price.
The company announced other incentives for its Cadillac, Saturn, Saab and Hummer nameplates. It said Cadillac, Saturn and Saab will offer $500 rebates, while Hummer will have special pricing for a rear entertainment system.
