Toyota Continues Interest-Free Car Loans

TOKYO Reuters reported that Toyota Motor Corp. , the world's third-largest carmaker, said on Wednesday it would extend its offer of interest-free loans for three models in the United States until January 2.

Toyota had originally planned to end the financing campaign on November 30, but decided to extend it in line with similar moves by major U.S. carmakers.

``We must extend interest-free loans to compete with other carmakers,'' a Toyota spokesman said.

But its interest-free loans in the United States are limited to the 2001 model Corolla, sport-utility vehicle 4Runner and full-size pickup Tundra under 36-month installment sales, he said.

The special financing campaign, initiated by General Motors Corp and matched by others, started after the September 11 attacks on the United States to support sales.

Earlier this month GM extended its offer of interest-free loans on some vehicles until January 2 although it scaled back the range of models to which the deals applied.

DaimlerChrysler and Ford Motor Co have also extended some interest-free loan offers until early January.

Mitsubishi Motors Corp has been offering interest-free loans but has not decided whether to continue them in December.

The special financing has been credited with lifting U.S. auto sales to a record pace in October but analysts and auto executives have warned the costs of the loans are unsustainable.

The loan deals are also widely believed to be pulling in sales now that might otherwise have been made in the next few months, setting the U.S. auto market up for a possible deep slump next year.

Honda Motor Co did not offer interest-free loans. Nissan Motor Co offered such loans in October but has not extended them.

Shares in Toyota were down 1.54 percent at 3,200 yen. Nissan's shares were up 0.5 percent at 605. Honda's shares were down 2.27 percent, while the benchmark Nikkei average fell 1.55 percent.