DETROIT: If auto loan interest rates rise as expected this year, General Motors and others are lil(ely to mal(e more subsidised loans, including zero per cent financing, to keep car sales flowing.

CFO Chucl( Stevens told reporters Tuesday after GM released its full-year and fourth-quarter earnings that generally, auto company finance arms try to make up for rising rates with subsidies.

GM expects rates will increase 0.75 per cent this year as the Federal Reserve acts to stave off inflation. As many as three quarter-point hikes are expected. Auto loan rates now run around 3pc to 4pc for buyers with good credit.

Across the industry, subsidised loans make up a relatively low percentage of incentive spending now because financing rates remain so low, Stevens said. But as rates rise, companies likely will move dollars from other sales incentives to keep loan rates low, he said.

`Leasing and cash-based incentives are kind of predominant now,` Stevens said. `As interest rates increase, there will be more subvented financing.

Then you`ll reduce other parts of the toolbox.` A quarter-point rate increase pushes up a typical monthly car payment by only $3, Stevens said. GM expects 2018 to be another strong year for sales because wages are growing, gas prices are low and consumers will have more disposable income due to taxcuts, Stevens said.

He made the comments on Tuesday morning, just after GM reported a $3.9 billion net loss for 2017 driven largely by a $7.3bn accounting charge.

Excluding one-time items, GM made $9.9bn, or $6.62 per share, the greatest since leaving bankruptcy in 2009.

The earnings beat Wall Street estimates.

Analysts polled by FactSet expected $6.33 per share. Full-year revenue was $145.6bn, which also topped expectations.

GM said the rewrite of the US tax code forced it to write down accumulated losses that it uses to avoid income taxes. Assets fell from $33.6bn, to $24bn. Since the corporate tax rate dropped from 35pc, to 21pc, the losses are worth less.

Stevens said GM still won`t pay much in US corporate taxes until after 2022 or 2023.

GM also announced that about 50,000 union factory workers will get $11,750 profit-sharing checks this month, based on a full-year pretax North American profit of $11.9 billion.-AP