Encore please

Radio Commentary
Edward Lapham is editor of Automotive News

When the terrorist attacks disrupted the American economy and depressed new-car sales, General Motors responded aggressively with 0 percent financing. Ford and the Chrysler group followed suit.

And it worked.

New-car buyers came back to the showrooms. As a result, September sales were down, but not as much as they might have been.

There is a downside.

The incentives are expensive. Analysts say they cost GM more than $3,000 per car, and the Chrysler group more than $2,200 per car.

That won't help the bottom line.

And there is another potential problem. If the crisis doesn't end soon, or if we consumers become bored with 0 percent financing, what can the automakers do for an encore?

You can reach Edward Lapham at elapham@crain.com

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