The car giant - a key component of the Dow Jones Industrial Average - saw its shares slide by more than 2%.

GM has seen profits soar in recent months on the back of cheap credit deals and generous consumer incentives

But with the cost of such deals soaring and sales tailing off, Wall Street analysts warned the policy is running out of steam.

Price war

Ford, which is scheduled to release its first quarter earnings on Wednesday, fell by 13 cents or 1.5% to $8.36 on the New York Stock Exchange.

GM's strong US sales have helped it consistently beat Wall Street estimates over the past two years.

But analysts were sceptical even before Tuesday that the car maker could hit its $5 per share target.

GM said its first quarter earnings rose to $1.48bn or $2.71 per share, up from $228m or 57 cents per share in the same quarter a year ago.

In early April, GM stepped up the price war that has dominated the US car market in recent months.

It offered zero percent financing for up to five years on almost every vehicle it sells and offering buyers the chance to test drive most GM vehicles overnight.