Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Auto Giant GM to Cut Prices on 2006 Models

SOUTHFIELD, Michigan -- General Motors, the world's largest automaker, will cut prices on 30 of its 2006 models to attract new customers, according to people familiar with the plan, as the company stops giving employee discounts to all buyers. The price cuts, which were scheduled to be announced Monday, will amount to as much as $4,800 on the Cadillac DTS, people familiar with the details said.

The Pontiac G6 gets a $645 reduction, and some models will get less than that, the people said. The automaker will offer a total of 50 models with some combination of reduced prices or added features, extended warranties or other changes at no extra cost, the people said.

GM, which sells 76 models in North America, is trying to retain market-share gains after ending the two-month employee-discount offer today. The promotion sparked a 47 percent gain in GM sales in June, the first time since January 2003 that Toyota Motor Corp., No. 2 in the world behind GM, didn't gain U.S. share. The announcement is part of GM Chief Executive Rick Wagoner's plan to make the prices of GM vehicles more attractive, particularly in Internet comparisons, and rely less on rebates.

GM lost more than $2.2 billion making cars and trucks in the first half of this year as it cut North American production to reduce inventories of unsold models. GM spokeswoman Deborah Silverman declined to comment.

Toyota said July 29 it would raise prices on 10 of its 2006 models an average of 1.2 percent. The automaker has now raised 2006 U.S. prices on all 2006 Toyota, Lexus and Scion brand models.

Automakers begin selling most of their 2006 models before October.

GM's price cuts include popular models such as the Chevrolet Silverado pickup, with a $3,000 reduction, and the GMC Yukon sport-utility vehicle, which gets a $1,300 lower sticker price, the people familiar with the plan said. They asked not to be identified because the details are not yet public.

Buick General Manager Steve Shannon said July 5 that GM will cut as much as $500 from the price of some Buick models, add more powerful brakes and other features valued at $1,300 for no additional cost and extend the warranty from three years or 36,000 miles to four-years, 50,000 miles. GM also said it will extend Hummer SUV warranties to the same length.

GM's gain in June sales, its biggest sales month in 19 years, helped it increase a U.S. market share that had fallen to 80-year lows. GM sales surged 2.1 percent ahead of their year-earlier pace through June after being down 6.7 percent through May. Its U.S. market share in June climbed to 32.8 percent, up from 25.7 percent after five months. GM may have gained another 13 percent in July, according to analysts surveyed by Bloomberg.

The automaker will need to convince buyers that the lower prices will not be followed by another hefty discount program, said Dan Poole, an analyst with National City Private Client Group in Cleveland. "I think people understand the deals aren't going to get any better, and this is as good as it gets," Poole said. "It's a great time to introduce it."

Japanese automakers including Toyota, Honda and Nissan have been less dependent on incentives than General Motors to drive sales. In June, GM's average U.S. incentive was 24 percent higher than the industry average of $4,427, while Toyota's average incentive was 36 percent lower, according to Bandon, Oregon-based CNW Marketing Research. The 2005 Cadillac DTS, which is also sold as a Deville for the 2005 model, ranges in price from $46,480 to $52,395 and the 2005 G6 runs from $19,490 to $24,835, according to California-based Edmunds.com, which tracks car and truck prices.