Economy-Finance

UPDATE 2-GM cuts warranty terms on Saab vehicles sold in US

(Adds details on Saab warranties)

DETROIT, July 28 (Reuters) – General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) cutwarranty terms on Saabs sold in the United States to reducecosts, but will continue to provide free scheduled maintenanceto compete with other premium brands, a GM spokeswoman said onMonday.

GM told dealers Friday it will cut its Saab extendedpowertrain warranty for 2009 models, effective immediately, tofour years, or 50,000 miles, from five years, or 100,000 miles,spokeswoman Joanne Krell said.

The car maker provides free scheduled maintenance for threeyears, or 36,000 miles, on Saab vehicles in addition to thewarranty, setting it apart from other GM vehicles, Krell said.Saab also has a four-year, or 50,000 mile, bumper-to-bumperwarranty.

The Saab powertrain warranty will run concurrently with thebumper-to-bumper warranty.

The combination of a four-year warranty and the scheduledmaintenance “makes sense to the import premium buyer, which iswhere Saab fits in the automotive landscape,” Krell said.

The decision to cut warranty terms applied only to the Saabbrand and not to other GM premier brands Cadillac and Hummer,Krell said. She did not have a dollar figure on the costsavings.

GM said earlier this month it planned to cut $10 billion incosts and sell assets totaling up to $4 billion to shore up itsliquidity due to the downturn in U.S. auto industry sales thathas most heavily affected large trucks and SUVs.

GM has been shopping its Hummer brand, but Chief ExecutiveRick Wagoner said on Friday the automaker remained committed toSaab, which analysts have long suggested could be divested toallow GM to narrow its brand focus.