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DETROIT, July 10 (Reuters) General Motors Corp. rolled out rebates and concessional financing for U.S. buyers of its all-new Silverado and Sierra pickup trucks while rival Ford Motor Co. extended discounts across its 2007 model-year line-up.

The new sales incentives from the No. 1 and No. 2 U.S.

automakers marked an escalation of stepped up discounting in showrooms amid signs of slack consumer demand and a developing price war in the full-size pickup truck market.

GM sales slipped 7 percent in the first six months of the year while Ford sales were down 11 percent, according to sales figures.

Both Detroit-based automakers have been pulling away from cut-rate sales to car rental agencies and stepping back from the kinds of blowout, incentive-driven sales tactics criticized for boosting short-term returns at the cost of future demand.

But GM was stung by a 24-percent drop in U.S. sales in June after it became the only one of the major six automakers to hold the line against increased incentive spending.

Toyota Motor Corp. surprised GM executives and market analysts by offering aggressive rebates of up to $3,500 or interest-free loans of up to five years on its revamped Tundra pickup truck in June.

GM's stepped-up discount matched that Toyota incentive offer on some models in the highly competitive California market, where sales for all of the major automakers have been slowed by a weaker property market.

GM offered buyers of its regular cab Silverado or Sierra trucks up to $2,000 in cash or reduced-rate financing, including interest-free loans for up to three years.

Buyers of GM's more expensive EXT and Crew cab models are being offered up to $3,500 on some models or cut-rate financing. In California, that includes an offer of zero-percent financing offer for up to five years.

The GM truck discounts expire at the end of the month.

Ford, meanwhile, extended a summer sales program that had been set to expire on Monday through the end of August.

The incentive program, which offers $2,007 in cash to customers buying 2007-model Ford, Lincoln or Mercury trucks or sport utility vehicles, is designed to work down inventory levels in anticipation of a new year of model launches beginning in the fall.

Auto sales incentives are widely tracked by analysts as an indication of the relative profitability of competing automakers and the pressure they face to move inventory.

Industry tracking service Edmunds.com estimated that GM, Ford and Chrysler Group spent a combined $2.6 billion on sales incentives in June, while Japanese automakers spent $823 million.

Chrysler, which had been offering deals for months to support sales of its aging truck and minivan line-ups, had the industry's highest incentives in June, according to Edmunds.

Reuters SZ SBA VP0445