Detroit Price War Heats Up Again as GM Raises Ante

DETROIT – General Motors Corp. (GM), raising the ante in Detroit's brutal price war, said on Wednesday it was raising the cash rebates on most of its 2003 and 2004 model year vehicles to $5,000.

The rebates on many of GM cars and trucks, including its popular SUVs, minivans and pickups, had previously been set at $4,500.

GM, the world's largest automaker, has called most of the shots in the U.S. auto industry's profit-gouging incentives war since the attacks on Sept. 11, 2001.

GM said its $5,000 cash-back offer, billed as an "owner loyalty program," applied only to current owners of its vehicles. For new customers it said it would continue to offer hefty discounts as well, along with a variety of interest-free loan programs.

GM's cross-town rival Ford Motor Co. (F) said, meanwhile, that its incentives program would remain essentially unchanged this month, following the sweetening of some deals announced in May.

Ford spokesman Jim Cain noted, however, that the No. 2 U.S. automaker was raising the cash rebate on its Freestar minivan by $1,000, setting it at a new high of $5,000 in a bid to increase sales.

The offer applies to customers seeking to finance their vehicle purchase through Ford's finance arm, Ford Credit (search), but those getting their auto loans elsewhere are eligible for a cash rebate of $4,000, Cain said.

"The minivan market is just brutal," he said. "There's a lot of new entrants in the marketplace."