WASHINGTON — Auto companies, desperate to recharge a dismal U.S. sales year, are trying to lure customers with an offer to cover car payments for buyers who lose their jobs.
General Motors and Ford Motor unveiled job-loss protection plans Tuesday, after the success of a similar program at Hyundai. GM said it will make nine car payments of $500 each for customers who lose jobs. Ford is offering payments of up to $700 for 12 months.
U.S. automobile sales are barely running above an annualized pace of 9 million this year. By comparison, car companies in recent years have sold between 16 million and 17 million vehicles. Analysts say the sharp drop suggests that Americans have grown so reluctant to buy new cars that they are even holding back on replacing vehicles that have been in accidents or no longer run.
Automakers are scheduled to release U.S. monthly sales results for March today. Jim Farley, Ford's marketing chief, Tuesday described March as an "awful" sales month. Weak results could add more urgency to industry and government efforts to find new ways to get people to buy cars and trucks.
On Monday, President Barack Obama called for stepped-up government support for auto buyers. He announced a government plan to back the warranties of GM and Chrysler vehicles, in a bid to reassure consumers who fear that the companies might file for bankruptcy. He also said he supported proposals that provided "generous" tax credits to owners who turn in older models for fuel-efficient new cars.
Such initiatives have so far stalled in the Congress.
In its new plan, Ford will cover payments for up to 12 months on any new Ford, Lincoln or Mercury vehicle for customers who buy a car by June 1 and lose jobs in 2009.
The GM plan is available for customers who buy any of its vehicles except Saab by April 30.