GM Cuts Prices of Some Mid-Size SUVs

DETROIT – General Motors Corp. (GM) has lowered the prices on some of its aging mid-size sport utility vehicles, which have suffered from slowing sales recently, a GM spokeswoman said Tuesday.

The price cuts total up to $2,000 on GM's mid-size SUVs, which include the Chevrolet TrailBlazer (search), GMC Envoy (search), Buick Rainier (search) and the extended versions of those SUVs, said Mike Chung, a pricing and market analyst with the Web site Edmunds.com.

"It's definitely an unusual move. It's something we really haven't seen from other manufacturers," Chung said.

GM declined to specify the size of the price cuts.

"We can confirm that we did adjust prices on our mid-size sport utility vehicles," said GM spokeswoman Deborah Silverman. "Recently we noticed with regard to our mid-size (SUVs) that there were several competitive vehicles that were priced below our models."

Chung said the price cuts are the latest move by GM and other automakers to try to move away from costly cash incentives.

Chrysler (DCX) has been pricing some of its new models, including its Dodge Durango (search) and Jeep Grand Cherokee (search) SUV, closer to the actual transaction price that consumers pay, in order to limit incentives.

Earlier this month, Ford Motor Co. (F) said it will offer a free desktop computer from Dell Inc. with the purchase of a 2005 model-year Focus sedan.

GM expects that new safety equipment in some of its vehicles will allow it to cut back on incentives, GM North America President Gary Cowger said at the Chicago Auto Show earlier this month.

GM's new Cadillac DTS and Buick Lucerne full-size sedans, which go on sale this fall, will have front passenger airbags that inflate to two different levels depending on the severity of a crash, whether occupants are wearing safety belts and on seating position.

In January, GM's incentives averaged $3,513 per vehicle, down from $3,830 in December and off from $4,189 in January 2004, according to Autodata, which tracks industry incentives. The Chrysler arm of DaimlerChrysler passed GM with an average of $3,541 in January, down from $3,904 in January 2004.

But Chung is skeptical that GM's move to cut prices will wean consumers off incentives.

"Customers are just so used to incentives," he said. "I think the jury is still out on that."

GM has steadfastly denied that rising gasoline prices have muted sales of SUVs, but Ford officials have said that higher prices at the pump are affecting sales.

The price of a gallon of regular gasoline averages $1.90, up from $1.66 a year ago, but down from an all-time high of $2.05 in May last year.