General Motors Corp. and Ford Motor Co. are increasing rebates and no-interest loans to recover from a slump in sales last month and stem market share losses to Japanese carmakers, according to Bloomberg News.

Both companies last week lengthened no-interest loan offers to five years from three on some 2004 vehicles, such as the Ford Explorer and Chevrolet TrailBlazer sport-utility vehicles, Bloomberg News reported.

Sales in the U.S. in October at the world's two biggest automakers fell from a year earlier as the carmakers offered fewer incentives on 2004 models, according to the Bloomberg News report.

General Motors, Ford and DaimlerChrysler AG's Chrysler may have to increase incentives as more customers switch to Toyota Motor Corp. and Honda Motor Co., Bloomberg News noted. Efforts to halt defections with new models, such as a redesigned Ford F-150 pickup truck and Chevrolet Malibu, have so far failed, according to the report.

"We expect to see acceleration of incentives on 2004 models soon," Merrill Lynch analyst John Casesa wrote in a report on Nov. 7. "October sales came in weaker than expected after two strong months."

The automakers have accumulated near-record numbers of unsold cars after Ford's sales declined 2 percent in October and General Motors's fell 7.2 percent. General Motors had an 89-day supply of vehicles, or 34 percent higher than its average for the month, Casesa said. Ford's backlog was 78 days, or 19 percent higher than average, according to Bloomberg News.

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