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Interest-Free Deals Limit Auto Sales Declines in September

by Staff
October 3, 2001
3 min to read


In a critical test of American consumer mood following the Sept. 11 terrorist attacks on the U.S., car and light-truck sales fell in September. But sales were down less than most auto-industry officials had expected as buyers snapped up interest-free deals rolled out by Detroit's Big Three late in the month, according to a Wall Street Journal story by Sholnn Freeman.


Overall, U.S. car and light-truck sales totaled

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1.3 million vehicles last month, down 8.7 percent from last year's record-setting performance. The latest results translated to a seasonally adjusted annual selling rate of 15.9 million vehicles, down from an 18 million rate a year earlier.


"We see some evidence that commercial life in the U.S. is returning to more normal circumstances," said Paul Taylor, chief economist for the National Automobile Dealers Association (NADA), noting that the zero-percent financing helped. Sales in the Northeast U.S. were hurt more than in other regions, according to reports from J.D. Power & Associates.


General Motors Corp. said its car and light-truck sales in September fell 2.9 percent

from a year earlier, as sales in the last 10 days of the month rebounded from a steep falloff right after the deadly terrorist hijackings.


Ford Motor Co., which quickly matched GM's 0-percent finance deals, said sales fell 9.6 percent last month, but a spokesman noted that sales to individual consumers were down only about 2 percent to 3 percent in most regions of the country except the New York area, where consumer demand was off about 9 percent.

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Chrysler sales fell a precipitous 28 percent, in part because of unusually high sales a

year ago of its minivan models, and the fact that the company was late in matching GM and Ford's latest zero percent interest offers; Chrysler waited until Sept. 22 to jump on the interest-free bandwagon.


Some Asian and European automakers, including Germany's BMW AG and South Korea's Hyundai Motor Co., boosted sales from a year earlier even without discounts to match GM or Ford's

plans. Overall, BMW's sales were up 8.7 percent on a daily-selling-rate basis to a new record in September, although the increase was the smallest seen this year.


Some foreign rivals are moving to match the discounts. Toyota Motor Corp., which reported a 4.2 percent sales drop, said it was offering a national program with interest-free deals on some models, including its Tundra full-size pickup truck, a growing threat to Detroit's

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profitable truck business.


Results from Asian and European automakers in the U.S. market were a mixed bag. Sales by Japan's Honda Motor Co. declined 3.8 percent from the same month last year. Germany's Volkswagen AG reported U.S. sales fell 15 percent. Sales at Hyundai Motor Co. jumped 50 percent on a daily-selling-rate basis, mainly due to the Korean automaker's continued expansion of its vehicle lineup, according to industry analysts.

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