GM says U.S. market "unsteady" even with incentives

LORDSTOWN, Ohio (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) Chief Executive Rick Wagoner said on Thursday the U.S. auto market remained "unsteady" and it was too early to forecast the success of its new incentive offer of employee discounts announced this week.

"It is very early days, but I would say one or two days out of the box the reaction is excellent, but we have to see," Wagoner told reporters at an event at GM's small car plant in Lordstown, Ohio.

"This market is so unsteady now we need to let it play out for a few days and see if we can use it to build some momentum," he said. "That's the reason we brought it out to see if we could find anything that would get the market going a little bit."

GM's U.S. sales have dropped 18 percent in the first seven months of the year as consumers pulled back from the SUVs and light trucks where its line-up is strongest.

In response, GM announced this week it would offer employee-level pricing discounts on almost its entire lineup of 2008 model-year vehicles to clear out inventory.

The discount offer marks GM's return to a strategy it abandoned in the last two years as it tried to make its pricing more transparent and to back away from the heavy discounting it relied on to bounce back from the 2001 recession.

Wagoner said GM was not abandoning that strategy, but said the industry-wide slump in U.S. auto sales had increased the pressure on all automakers to offer new discounts.

It is a time when more and different kinds of merchandising is required," Wagoner said. "It's a sign of the times that we're trying to stimulate the market."

Wagoner said GM's "employee pricing for everyone" discount offer, backed by a new advertising campaign, had driven more traffic to its Web sites and customer visits to showrooms.

"Our confidence in the market is not so good right now. Obviously, it's pretty weak now in U.S. sales," he said. "Eventually, it will come back, I just can't tell you when. At this point, it still seems pretty uncertain out there."

(Reporting by Kevin Krolicki; Editing by Andre Grenon)