American Motors said costly incentive programs and lower sales resulted in a $40.1-million loss in the third quarter--more than twice what it lost in the same period last year.
AMC said the losses reflect the cut-rate financing programs and lower sales but operating margins improved.
"From a marketing standpoint, the incentives helped boost retail sales and substantially reduced dealer stocks of 1986 models," Chairman Joseph Cappy said. "From a financial standpoint, we should benefit from these reduced stocks in future quarters."
AMC's car sales so far this year have been running almost 41% below year-ago levels despite numerous buyer incentive programs, including a 0% interest rate offer on two-year loans through the end of this month.
The third-quarter loss amounted to 40 cents a share, compared to a net loss of $19.1 million, or 20 cents a share, in the same period a year ago. Sales for the third quarter amounted to $805.2 million, down 21.9%.