Ford Motor Co. moved Nov. 14 to match rival General Motors Corp.'s extension of no-interest financing. The No. 2 automaker will extend zero percent financing on 36-month contracts for most 2001 and 2002 Ford cars, trucks, sport-utility vehicles and minivans through Jan. 14, 2002. Low-interest rates also were being offered on longer-term contracts.

Ford admits the move, which came in response to GM's extension of zero percent financing until Jan. 2, will dent the company's bottom line.

"Long-term, it's not sustainable," said William Clay Ford Jr., chairman and CEO of Ford. "It's very expensive. Short-term, we're going along with what the competition is doing.

"It's been great for the customer, it just hasn't been great for us," Ford, the great-grandson of company founder Henry Ford, told reporters following a speech in Kansas City on Nov. 14. "We're going to have to find a way ultimately to wean ourselves from this."

Effective Nov. 21, interest rates on 2001 cars and trucks will be offered at zero to 3.9 percent interest, depending on the length of the contract, according to Ford. Interest rates on 2002 vehicles will range from zero to 5.9 percent.

Consumers can choose cash rebates or available leasing options as an alternative to the no- or low-interest financing plans. The program continues to exclude the new Thunderbird and Escape SUV.

GM, which launched the offers in late September to stimulate consumer demand following the Sept. 11 terrorist attacks on New York and Washington, announced Nov. 12 that it was extending its zero interest finance offer until Jan. 2.

Chrysler's zero- and low-interest loan program is set to expire on Nov. 19 but it is widely expected to extend it as well. Some foreign car makers, including Toyota Motor Corp., which is offering financing deals of its own, are also likely to be feel forced into extending bargain-basement loan deals, according to industry analysts.

Apart from eating away at profitability, industry analysts and executives have said the price war that GM started is pulling ahead vehicle sales that might otherwise have been made in the next few months.

That, in turn, has prompted many analysts to warn that the industry may experience a steep falloff in sales in the first half of next year.