Auto sales expected to slow to a run in second half

DETROIT -- Like a sprinter running a 10-kilometer race, U.S. auto sales sped to a record start in the first half of 2000 but seem a little winded now.

Most industry analysts predict sales will slow over the next several months, although the year's total will still surpass last year's record of 16.9 million vehicles. But as sales slow, General Motors Corp., Ford Motor Co. and the Chrysler side of DaimlerChrysler AG will rely on a combination of new incentives -- cash and cheap loans -- to keep buyers coming to dealerships.

Analysts say automakers are looking for a modest decline.

"I think automakers are happy with a market that's going from white-hot to red-hot," said Diane Swonk, economist with Banc One in Chicago.

So far, industry analysts say there are few economic warning signs that vehicle sales are about to plunge. Swonk and other analysts said there's still little evidence of gas prices scaring consumers away from new car buying.

But some economic reports have raised concerns that the Federal Reserve could push interest rates higher again. Higher rates make loans more expensive, and automakers appear more willing to raise some bargain-basement finance rates, which do tend to slow sales.

In moves that counter rising rates, GM and Ford set new incentives that increased cash rebates, following Chrysler's lead. GM now offers $2,500 rebates on several models.