DETROIT, March 19 (Reuters) - General Motors Corp. (GM.N) said on Monday its Saturn Aura Green Line hybrid will qualify for a $1,300 tax credit, making it the cheapest hybrid in the U.S. market.
The Aura, which will be the first passenger sedan hybrid from a U.S. automaker and will compete with Toyota Motor Corp.’s (7203.T) Prius, started shipping to dealers last week and will go on sale this month.
Ford Motor Co. (F.N) has hybrid versions of its Ford Escape and Mercury Mariner sport utility vehicles on the market.
GM, which launched its Saturn Vue Green Line hybrid SUV in 2006, has been trying to distance itself from its reputation as a company focused first on gas-guzzling trucks. The automaker later this year will also launch a hybrid version of its higher-volume Chevrolet Malibu sedan.
GM has also set a target for production of an all-electric car in 2010, which will be called the Chevrolet Volt.
The automaker has not disclosed a sales target for the Aura Green Line, which will be priced at $22,695, including delivery and handling fees. On that basis, the Prius is priced at $22,795.
Hybrids can run on a combination of battery power and a conventional engine and are usually priced higher than traditional vehicles due to the battery and other advanced technology.
The Energy Policy Act of 2005 calls for hybrids purchased or placed into service after Dec. 31, 2005, to be eligible for a federal income tax credit of up to $3,400. “With a starting price over $2,000 less than any midsize hybrid sedan and a $1,300 tax credit, it makes true hybrid fuel savings available to more people than ever before,” Saturn General Manager Jill Lajdziak said of the Aura Green Line.
Credit amounts begin to phase out once the automaker has sold more than 60,000 eligible vehicles. Toyota was able to offer a tax credit of over $3,000 on its Prius, which is phasing out now and will expire in October.
((Reporting by Jui Chakravorty; editing by Andre Grenon; Reuters Messaging: email@example.com@reuters.net; +1-313-598-5949)) Keywords: GM AURA
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