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GM Chief: Fed Rate Cut May Help SalesGeneral Motors Corp. Chief Executive Officer Rick Wagoner said an improved credit market following last Friday's decision by the Federal Reserve to lower interest rates may benefit "weaker" U.S. auto sales, according to Bloomberg News.
Meanwhile, GM's August U.S. sales, bolstered by new incentives after a 22% decline last month, have been stronger than the automaker anticipated, Vice Chairman Robert Lutz said last week, according to Bloomberg.
"The quicker the situation in the credit markets - particularly mortgage-related - works itself out it certainly reduces the risk we would see on the auto side," Wagoner said Friday in Royal Oak, Mich.
The Fed cut the discount rate, the rate it charges banks, by 0.5 percentage point, to 5.75% as it sought to contain the subprime-mortgage collapse that has been damaging markets for the past two months.
GM is offering five-year, no-interest loans as well as rebates as high as $4,000 on models such as Chevrolet Silverado pickups through Sept. 4. The loans cost as much as $4,500 per model, GM sales analyst Paul Ballew said Aug. 1. That's about $1,000 more than June rebates.
"Especially the pickups are moving well," said Lutz, according to Bloomberg. L&MT
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