DETROIT – General Motors Corp. (GM) on Thursday said it was extending through Sept. 30 the discount program under which it is selling anybody a new car or truck at the same low price a GM employee would pay.
The wildly successful program, which the ailing automaker introduced on June 1, had been set to expire on Sept. 6. But GM spokeswoman Brenda Rios said it would continue through the end of next month.
Rios also said the program would now include some large pickups and sport utility vehicle from the 2006 model year. It had previously been limited to 2005 model-year vehicles.
Some Wall Street analysts have said the employee discounts are squeezing already low or non-existent profit margins on the vehicles sold by GM in North America.
But officials at the world's largest automaker have said the cost of the employee discounts is essentially unchanged from other rebates and cash-back deals offered before June 1.
In the first two months that GM offered the employee discounts, its U.S. sales jumped by 42 percent and 20 percent respectively. But Merrill Lynch analyst John Casesa said in a research note this week that GM's sales were believed to have declined by as much as 10 percent in August, because of depleted inventories of new vehicles from the outgoing 2005 model year.
Ford and Chrysler, following GM's lead, are now expected to continue their programs through Sept. 30 as well.
GM has led Detroit's incentives war ever since it introduced interest-free car loans to boost showroom traffic in the aftermath of the Sept. 11, 2001, attacks on the World Trade Center and the Pentagon.
Thursday's announcement by GM came a day after Moody's Investor Service (search) became the last of three major ratings agencies to cut GM's debt to high-yield or "junk" status. It was the latest blow to the automaker as it battles ever intensifying global competition and rising costs.
GM's shares were down 19 cents, or 0.55 percent, at $34.08 on the New York Stock Exchange.