Autos: Detroit's Real Wheel Deal

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U.S. automakers are jostling one another like the last four cars in a demolition derby. The bumping and grinding began Aug. 15, when General Motors offered customers the rockbottom financing rate of 7.7%. The dramatic GM ploy surprised Ford, Chrysler and American Motors, which last week slashed their financing rates. Ford matched GM's 7.7%, and Chrysler and AMC went even lower, to 7.5%. Compared with conventional car loans, which carry rates as high as 13%, the automakers' deals strike customers as a steal. At Village Ford in Dearborn, Mich., showroom traffic increased 50% last week. "When they come in the door, they're ready to buy. We've been absolutely swamped," says Bob Wheat, Village Ford's general sales manager.

The Big Four's boomlet, though, could be followed by a bust. The cut-rate financing applies only to 1985-model cars. When the incentives expire at the end of September, dealers will face the more difficult task of selling 1986- model autos without attractive financing. In the midst of a sluggish economy and rising Japanese competition, that will be a very grueling demolition derby indeed.