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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (263)	11/2/2001 6:04:14 PM
From: robert b furman	Respond to of 25522

Hi Mike, No doubt about it borrowing sales today from tomorrow. When I worked for Chevrolet,any period that followed strong incentives felloff in sales rates. It won't be terrible ,but it will be off. Our plus customers this month were all the well to do buyers who had financial strength to be opportunistic with advancing a purchase. Manufacturers love to have 0.0 for 36 months. These people by definition are able to make a large payment. They are usually the substantial down or cash buyer.Instead they buy with the factory's free money and keep their funds working for them. It may be that these rates are continued.With interest rates down so low,the factories really aren't buying down that much! An example - full size trucks (85%of our sales in Tx): 36 months has a rate of 0.0 48 months has a rate of 2.9 60 months has a rate of 4.9 Let's face it big trucks aren't cheap.Even with no interest divide 23000 by 36 and you have a pretty healthy monthly payment. In reality the majority of deals get done for 60 months,some at 48 and only the well healed do 36.So the factory is getting a blended rate of somewhere between 3.0 and 4.0. Just this week Ford and GM sold billions of bonds ( primarily for their finance arm) at 4.20%. They are singing the blues and estimating an incentive cost of $2500/ sale. Heck Dodge has been throwing 3500-4000 all this year. I'm emphasizing a lean inventory and solid service, body shop,parts and used vehicles. We are the dominant dealer in our town with a great reputation and been doing business for 62 years. So we will be around the flip the switch if the lights go out. gulp But this month we sold 104 new vehicles and our average is 86 - so yup it's going to be lean this Christmas Little Timmy. Bob