GM has cash for customers' old cars

Tony Van Alphen

BUSINESS REPORTER

General Motors of Canada has become the country's fourth automaker to offer consumers cash if they scrap their old vehicles and buy new company models.

GM, the industry's biggest auto retailer, announced yesterday a "cash for clunkers" program that matches the highest offer of $3,000 by rival Ford Motor Co. of Canada in an escalating battle for consumer attention in the fiercely competitive car market.

GM says it will give consumers rebates between $500 and $3,000 toward the purchase of new 2009-2010 cars and trucks if they meet the criteria of a federal scrappage program.

For example, consumers would get a $500 rebate on a Chevrolet Aveo subcompact; $1,000 on a Chevrolet Cobalt compact; $2,000 on a Chevrolet Equinox crossover vehicle; or $3,000 on a Buick Enclave luxury crossover vehicle if they recycle their old vehicles.

The federal government's "Retire Your Ride" program offers consumers $300 or other incentives such as public transit passes if they scrap high-polluting, fuel-inefficient vehicles that are 15 years or older.

Hyundai Auto Canada introduced the industry's first program with a link to the federal initiative with an incentive of up to $1,000 last month.

Within days, Chrysler followed with a maximum offer of $1,500. Ford jumped ahead of its rivals by offering up to $3,000.

Chrysler spokeswoman Mary Gauthier said she could not provide sales figures, but her company's program has generated "considerable activity and traffic" at dealerships.

Analysts expect other major automakers to introduce similar programs.

Automakers had pressed federal Industry Minister Jim Prentice to boost the government's clunker program with much higher incentives since early this year, particularly after a U.S. program fuelled a huge increase in sales. That program cost the U.S. government about $3 billion (U.S.).

However, automakers started their own clunker incentives after Prentice indicated he would not increase amounts in the "Retire Your Ride" program.

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