General Motors initiated a series of steps yesterday - from cutting production of trucks to offering aggressive incentives - to combat the drop in demand for large vehicles, and record-high gas prices.
The announced production cuts and increased incentives come as the largest US car maker struggles with a deepening slump in US car sales amid a consumer exodus from pickup trucks and SUVs. GM also said it hired Citigroup to help review its Hummer brand that the US firm is looking to sell or revamp.
GM plans to raise average prices for its 2009 models more than 3% to reflect additional vehicle features and higher commodity prices, the dealer said.
It said it will decrease production of pickup trucks and SUVs by 170,000 units but increase output of cars and vans by 47,000 units during the second half of the year.
The company will also temporarily idle several North American truck plants starting next month and schedule overtime for workers at plants that build cars and vans through the second half of the year.
GM assembly plants in Fort Wayne, Indiana; Arlington, Texas; Janesville, Wisconsin; Moraine, Ohio; Silao, Mexico; and Oshawa, Ontario, will be closed for anywhere from one to 10 weeks between July and the rest of the year.
GM's announcement follows rival Ford's decision on Friday to cut truck production and delay the launch of its redesigned top-selling F-150 pickup truck to clear swollen inventory of vehicles.
GM's US sales are down 17% to the end of May from a year earlier, led by a 23% drop in truck sales. In May, GM's truck sales tumbled nearly 40%. GM announced early this month it was reviewing Hummer and could sell the military-derived SUV line.
