Auto Sales Rise, but Discounts Hurt Profits

U.S. automakers, using discounts, are on pace to post their second-best sales year ever in North America. What they aren’t making more of is profits.

The 16 largest automakers by sales in North America, led by General Motors Corp., Ford Motor Co. and DaimlerChrysler’s Chrysler unit, increased spending on rebates and other incentives to a record $3,746 per car in September, CNW Marketing Research said.

Automakers will sell 19.8 million cars and light trucks in North America this year, compared with the record of 19.9 million set in 2000, research firm Global Insight Inc. said.

At the same time, profits before interest and taxes at GM, Ford and Chrysler will fall to a combined $8.37 billion this year, Merrill Lynch & Co. analyst John Casesa estimated, less than half the $17.15 billion in profits they recorded in 2000, the last year before automakers began relying on interest-free loans.