Perhaps the best part of the "Employee Discount for Everyone" offer is that GM's average incentives for June were up only slightly from May and were actually down $600 from June 2004, according to Edmunds.com. Given the automotive giant's dire financial straits, the sales boom generated by the deal could not have come at a better time.
It's understandable, then, that another struggling automaker, Ford
The current incentive programs are designed to clear out inventories of 2005 models and make way for the 2006s. The hope among automakers is likely that the new cars and trucks won't have to carry such heavy incentives.
Unfortunately for Ford, GM has a distinct advantage with respect to all-new offerings. For the 2006 model year, GM is unveiling a slew of new vehicles, including the Pontiac Solstice, Chevrolet Cobalt, Saturn Sky, and Cadillac DTS. Ford, meanwhile, has just one new car in the offing -- the Fusion sedan. Given that it has little new to offer, Ford's sole means of getting customers to visit its lots may be continued incentives.
With its back against the wall, it's understandable that Ford is matching GM's moves. Unfortunately, though, Ford may have a tougher time than its bigger rival of breaking out of the cycle of incentives.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.