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GM Tries to Cut Cord on Costly Rebates

January 23, 2004

General Motors Corp., the undisputed leader in the two-year-old auto incentives war, wants to go on a rebate diet. But so far, the automaker looks like an ambivalent New Year's reformer who can't get away from the all-you-can-eat buffet, according to USA Today.

GM promises that it has a multifront plan to cut incentives over the next two years by as much as half of the $4,300 a vehicle it spent last year. Yet already this month, it has said it will give

five-year/zero-percent loans or $2,500 to $3,500 cash rebates on most of its cars and trucks through March to get the sales year going, the national newspaper noted.

"If we don't get off to a fast start, it makes it hard to reach our objectives," said GM Chief Executive Rick Wagoner. Still, Wagoner seems

determined to make a change, according to USA Today. "I think we can bring down our overall

per-vehicle spending and raise our revenue per vehicle by year end," he said.

While many question whether GM will be successful, the whole industry is watching, USA Today noted. GM, the world's No. 1 car producer, has set the pace for all automakers on incentive spending.

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