(Adds Ford rebates)
By Tom Brown
DETROIT, Jan 30 (Reuters) - General Motors Corp. and Ford Motor Co. ratcheted up consumer incentives on some of their most popular sport utility vehicles on Thursday, in the latest escalation of Detroit's profit-eating price war.
The moves by the world's two largest automakers came just one week after they rolled out costly new incentives to lure buyers amid signs of slower U.S. vehicle sales.
GM, the No. 1, said it was raising cash rebates by $500, to a total of $2,500, on the highly profitable Chevrolet Tahoe, Suburban, Trailblazer, and GMC Yukon, Yukon XL, Envoy and Oldsmobile Bravada SUVs.
GM, which raised cash rebates on most of its full-size pickup trucks last week, said it was also boosting the cash incentive on its Savana and Express vans by $500 to $2,500.
The cash-back offer on full-size pickups, which GM upped to $2,500 last week, had been expected to expire on Friday. But GM spokesman Jeff Roegner said it was being extended through February as the automaker seeks to lure buyers with new discounts and interest-free loan deals.
"There is a great deal of competition out in the marketplace right now and we will continue to show leadership," Roegner told Reuters.
GM is considered the front-runner in the incentives race that has offset weak consumer confidence and bolstered U.S. auto sales since the Sept. 11, 2001 attacks on America.
Wall Street analysts say GM's sales likely fell about 10 percent this month, however. They cite its heavy discounts and strong results at the end of last year, which pulled some sales ahead.
Analysts expect Ford to report a sales increase for January. But hours after GM announced its latest discounts, the No. 2 automaker said it too was offering new incentives.
"TIT-FOR-TAT
"They (GM) are determined to grab market share but we're determined to defend our market share," Ford spokesman Jim Cain said of the tit-for-tat incentives battle.
Starting Saturday, he said Ford would raise cash rebates on four-door versions of its popular Explorer SUV and the full-size Expedition by $500. The cash-back offer increases incentives on the four-door Explorer to a total of $2,500 and to $2,000 in the case of the newer Expedition.
Going toe-to-toe with GM, Cain said Ford was also increasing cash rebates on its Econoline and Club Wagon vans by $500, to a total of $2,500. And like GM, Ford was extending a bonus offer on its F-Series pickup, which will keep cash rebates on gas-powered versions of the hot-selling vehicle at $2,500 until at least March 3.
It was not immediately clear if the Chrysler side of DaimlerChrysler AG would match GM by rolling out new incentives of their own.
But Ford and Chrysler have both followed GM reluctantly on pricing in the past, while complaining about its aggressiveness and the bottom line effect of discounting on industry profits.
Detroit's automakers are not alone in playing the incentives game to entice customers into showrooms amid mounting concerns about the economy and the prospect of a U.S.-led war with Iraq. But foreign automakers have generally been much more conservative than their U.S. counterparts.
The Big Three hit consumers with a blizzard of rebates and zero-percent loan deals in December that piled an average of $3,119 in incentives on every vehicle they sold.