Auto sales have remained surprisingly strong in November — easing the recession, and possibly shortening it, with automakers beginning to announce plans to increase production more than initially expected early next year to rebuild inventories, according to a story by Danny Hakim in the New York Times.

November's healthy sales, after October's record-setting pace, have been driven by a wave of zero percent financing offers from the Big Three, which have been good news for car buyers with good credit and have attracted many others to dealerships.

On Nov. 26, the National Bureau of Economic Research said the country was officially in a recession which started in March. But many economists say the auto price war, regardless of its implications in Detroit, will help the larger economy.

What is good for the economy, though, is not necessarily good for the Big Three automakers. Analysts say incentives have increased automakers' losses and drawn criticism from investors and even from top executives at Ford and Chrysler, which have followed the lead of General Motors in using zero percent financing. Much of the cost will liekly be dumped onto auto suppliers, whose profit margins are already narrowing.

GM initiated the zero percent deals when sales stagnated after the Sept. 11 terrorist attacks, but the company also saw a chance to gain market share after years of declines, because it had one of the newest crops of pickups and sport utility vehicles on the market. GM has started to gradually ratchet down the incentives by excluding some vehicles and offering interest-free financing only on three-year deals.

Ford officials said in their third fiscal-quarter report that incentive costs had risen from 11 percent of revenue last year to 16 percent this year. Each percentage point increase costs $1 billion in pretax profits, a chief reason Ford is expected to have its first year of net losses since 1992.

A positive note for the economic outlook next year is that the financing deals have greatly reduced inventories on car lots, meaning that production may increase in the first quarter of 2002. Officials at Ford, which cut production after the terrorist attacks, said Nov. 27 that they had recently increased their projections for first-quarter production because inventories of cars and trucks were at their lowest level since March of 1992.

Analysts are predicting that November's annual sales rate, seasonally adjusted, will be 17.5 million to 18.5 million vehicles, compared with 16.4 million in November 2000. The official results will be reported by the industry on Dec. 3. November's continuing strong sales follow a 21.3 million rate in October, the biggest sales month in the industry's history.

At the same time, analysts have been pessimistic about next year, opining that big sales in October and November will steal sales from 2002.