DETROIT -- General Motors, hurt by weaker U.S. sales this year and high inventories, will roll out a new consumer incentive program on Thursday that includes a $1,000 cash rebate toward vehicles that have been unsold for more than 120 days, dealers said on Tuesday.

The "March Madness" sale, which can be combined with other sales incentives, is GM's first national incentive program since the automaker named a new head of North American sales and marketing last week.

A GM spokeswoman declined to comment on the incentives. "No program is final until it's final. I have nothing to announce today," said GM spokeswoman Deborah Silverman.

One Michigan dealer, who described his January and February sales as "horrible," said: "We need something for momentum. I'm pretty optimistic that it will give us the momentum we need."

GM's U.S. sales so far this year have fallen more than 6 percent, and the automaker has scaled back production, as highlighted by last week's news that it would lay off 3,000 workers at a Michigan plant and cease production of the cars made there.

Through the first two months of this year, GM had scaled back on its profit-punishing incentives and national advertisements announcing new discount deals, analysts said. But lackluster U.S. sales and high inventories of unsold vehicles meant that GM had to announce another high-profile incentive program sooner or later, analysts and dealers said.

GM offered an average of $3,814 in cash rebates and cut-rate financing on every new vehicle it sold in February, according to industry tracking firm Autodata. That was more than any other automaker, but 9 percent less than GM's average incentives in February 2004, it said.

Last week, GM named Mark LaNeve, who had been instrumental in the resurrection of GM's Cadillac brand, as group vice president of North American sales and marketing. His predecessor, John Smith, was named to the new position of group vice president for global product planning.

Paul Ballew, GM's executive director of global market and industry analysis, said last week that GM's vehicle inventories grew in February, ahead of the usual "spring selling season," and the automaker hoped to cut those inventories heading into the second half of the year.

Toyota Motor Co. is poised to overtake DaimlerChrysler as number-three carmaker once and for all before the end of the decade.

A new study released by CSM Worldwide of Farmington Hills, Michigan, last week flatly predicts that Japan's largest automaker will surpass DaimlerChrysler as the third-largest seller of new vehicles in the United States by 2009. Toyota, which markets the Toyota, Lexus, and Scion brands, is currently fourth in the U.S. , with 12 percent of the light-vehicle market, behind General Motors, Ford Motor Co., and DaimlerChrysler, according to CSM.

Joseph Barker, CSM Worldwide manager of North American sales analysis, said by 2009, CSM expects annual Toyota Group sales to grow by 23 percent, to more than 2.5 million units per year or 14.1 percent of the U.S. market. The growth should be enough to dislodge DaimlerChrysler - which sells Chrysler, Jeep, Dodge, Mercedes-Benz and, starting next year according to current plans, Smart vehicles in the U.S. - from the number-three spot. "Robust growth for the automaker will stem from an unrelenting product offensive, intensified effort in the luxury market, incremental volume from Scion, and strong brand equity," Barker said.

Toyota executives said during a year-end press conference in Tokyo they expect sales to rise seven percent next year to a record 8.03 million vehicles globally as result of new production capacity around the world. That would follow a ten-percent rise in sales by the group in 2004 to an estimated 7.47 million units.

"The global auto market expanded rapidly this year led by China, Eastern Europe and other Asian countries, and our customer base has grown bigger," President Fujio Cho told a year-end news conference. "In Japan, Toyota alone will aim to keep a market share of around 44 percent, while we expect bigger sales in every other region to bring overseas sales to 5.38 million vehicles in 2005 - marking the 14th straight year of increase," Cho added.

Cho, however, also said Toyota also expects sales outside Japan to grow by another ten percent in 2005. Toyota also expects to sell 8.5 million vehicles in 2006, which would propel it into a tight race with General Motors Corp. for global leadership.

Toyota, which is considered the world's best-managed automotive company, has come close to catching Auburn Hills-based Chrysler Group in recent years and has cut into the big lead once held by Chrysler and Mercedes combined. Chrysler Group executives have played down the race with Toyota , and Chrysler is expected to gain market share this year for the first time since the late 1990s.

Toyota , however, has mounted an aggressive campaign to bolster its market share around the world and has expanded its market share significantly over the past half decade. One of the company's stated goals is to become the world's largest automaker, surpassing GM, by the middle of the next decade.

The updated version of the Toyota Avalon, which will be introduced officially at the North American International Auto Show in Detroit in January, offers a hint of things to come on the car side, Barker said. In addition, Toyota also hopes to lure truck buyers with a more expansive lineup of larger and more powerful crossovers, SUVs, and pickups in the works, Barker said. CSM also expects Lexus sales to grow by 40 percent by 2009 with the addition of new nameplates and successor models that will exceed the sales level of outgoing vehicles by as much as five-fold.

CSM also is predicting sales from Scion, Toyota 's youth brand, will reach 125,000 units in 2005 and hold at around 120,000 units annually over the long term, Barker said. Barker noted Scion is bringing in new customers rather that recycling loyal Toyota buyers.

The company's big American manufacturing base makes Toyota less vulnerable to instability in the dollar/yen relationship, which has a profound impact on vehicle costs. North American-made vehicles will account for 63 percent of Toyota's U.S. sales in 2004. That number is forecast to rise to 70 percent by 2009, CSM estimated. "Strong residuals have the power to turn a first-time buyer into a long-time brand loyalist," said Barker.

Barker added that Toyota's continuing strength ensures that the U.S. market will remain intensely competitive in the years to come.

One of the company's stated goals is to become the world's largest automaker, surpassing GM, by the middle of the next decade.

SHANGHAI -- General Motors has slashed prices of two Buick models in China by as much as 15 percent to counter a move by Japanese rival Honda Motor Co., dealers said on Friday.

GM's main domestic venture said in a statement that retail prices on its Buick Regal would now start at $24,625 and prices on its Excelle sedans would start at $14,475. It did not specify previous pricing.

But two dealers said that amounted to as much as a 10 percent discount on the Regal and 14.7 percent on the Excelle -- days after Honda began offering sedans at a 7 percent discount, setting off the latest round of discounting to convulse the world's third-largest vehicle market.

Chinese car prices have headed south for years as foreign automakers boost capacity to grab a slice of the fast-growing market, squeezing margins for the likes of Volkswagen.

Global automakers including Ford Motor Co., Nissan Motor Co. Ltd. and Toyota Motor Corp. are investing more than $13 billion in China to triple annual production to about 6 million cars by 2010.

Discounts are taking on new significance in a decelerating market as Beijing applies the brakes to slow a racing economy and restricts auto loans, keeping buyers at home.

Government credit curbs in 2004 reduced the growth rate of car sales to 15 percent from almost doubling in 2003, when it was the world's fastest-growing auto market.

Analysts now expect the car market to grow just 10 percent in 2005 after rising 15.2 percent in 2004 to 2.33 million units, which followed a near-doubling in 2003.

GM is the No. 2 player in China behind VW. The country yielded a fifth of GM's earnings in the third quarter, but analysts warn the outlook may be clouded by persistent market weakness and by price wars that picked up in mid-2004.

Automotive News / March 22, 2005

General Motors has appointed Steve Shannon, 46, as marketing general manager for Buick. He will run the day to day operations of the division.

He will report to John Larson, 42, who is general manager of both Buick and Pontiac-GMC. GM also announced that Larson will run the day-to-day operations of Pontiac-GMC.

The changes are effective April 1.

Shannon is currently executive director, marketing services, for GM North America.

DETROIT - General Motors Corp., the world's largest automaker, said Tuesday it lost $1.1 billion in the first quarter, clobbered by rising health care costs, lukewarm response to some new models and special charges. The loss at its worldwide automotive operations more than doubled to $1.3 billion, most of it in North America.

It was GM's steepest quarterly deficit since the first quarter of 1992, when it reported a $21 billion loss primarily because of changes in accounting procedures for retiree health care costs.


The January-March result amounted to a loss of $1.95 per share, compared with earnings of $1.3 billion, or $2.25 a share, in the year-ago quarter, when the company benefited handsomely from its finance arm and improved business in Asia.


GM said its revenue fell 4.3 percent to $45.8 billion from $47.8 billion a year ago.


Excluding special charges, GM said first-quarter earnings amounted to a loss of $839 million, or $1.48 a share, compared with net income of $1.2 billion, or $2.12 a share, in the first quarter of 2004.


The most-recent result was in line with Wall Street expectations for a loss of $1.49 per share, according to Thomson Financial.


GM shares slipped 17 cents to $26.02 in morning trading on the New York Stock Exchange, just above its 52-week low of $25.60.


Detroit-based GM warned investors in March that its first-quarter earnings would be below previous estimates of break-even or better. It has said it expects income of $1 to $2 per share for the full year, down from a previous guidance of $4 to $5.


GM sales in the United States, its largest and most competitive market, sank 4 percent for the first three months of 2005 from a year ago. For the same period, its U.S. market share slipped to 25.6 percent from roughly 27 percent, according research firm to Autodata Corp.


It shares have plunged in recent weeks to levels not seen in a decade or more.


The $1.3 billion loss from GM's global automotive business compared with earnings of $561 million in the year-ago quarter. In North America, GM said it lost $1.3 billion versus a profit of $401 million in the first quarter of 2004.


"While most of our business units exceeded expectations, the results at GM North America were clearly disappointing," said GM chairman and chief executive Rick Wagoner, who last month took over daily responsibility of the automaker's struggling North American division.


"On the cost side of our business we continue to make progress in most key activities, but we need to accelerate our efforts on the challenging U.S. health care situation," Wagoner said.


GM did not provide a tally for health care expenses in the quarter but has said it expects its full-year tab for medical expenses to approach $6 billion.


The company said its market share in North America was 25.2 percent in the first quarter, down from 26.3 percent a year ago.


Asian automakers such as Toyota Motor Corp., Nissan Motor Co. and Hyundai Motor Co. continue to make U.S. market share gains with new products at the expense of GM and Ford Motor Co., the nation's No. 2 automaker.


GM's GMAC finance arm, which has contributed heavily to profits in recent quarters, earned $728 million in the quarter, down from $764 million in the year-ago quarter. The last time GM's automotive earnings outpaced those at GMAC was in the fourth quarter of 2002.

GM Europe posted a loss of $103 million in the first quarter, an improvement from a loss of $116 million a year ago. GM Asia Pacific earned $60 million in the first quarter, compared with earnings of $275 million in the year-ago quarter.

GM Latin America/Africa/Middle East reported earnings of $46 million in the first quarter, up from $1 million in the first quarter of 2004.

The company has said U.S. health care costs continue to grow at an excessive rate and hamper profitability. GM spent $5.2 billion last year to cover 1.1 million salaried and hourly employees, retirees and family members. GM has said the amount could grow to $5.8 billion this year.

GM expects to get little relief from the United Auto Workers union, which said last week it won't reopen its contract to negotiate lower costs. The union said it will do what it can within the four-year contract, which expires in 2007, to help GM lower costs.

"In our view, the deterioration in GM's financial condition is not yet serious enough to scare the rank-and-file at the union," Merrill Lynch analyst John Casesa said in a research note.

Ford, GM's crosstown rival, also has been hurt by high health care and materials costs and earlier this month lowered its profit forecast for 2005. Ford is expected to announce further production cuts when it releases first-quarter earnings results Wednesday.

"In our view, the deterioration in GM's financial condition is not yet serious enough to scare the rank-and-file at the union," Merrill Lynch analyst John Casesa said in a research note.

Finally, GM needs to focus more on how its vehicles can be used and less on how much emotion they elicit. The traditional industry has a hard time understanding the success of its Japanese rivals in the U.S. market, because they see their rivals' vehicles as plain, unstylish, and unexciting. But there is indeed a large market out there for efficient, reliable transportation, and GM should go after it.