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The Federal Reserve’s interest rate hikes are making it costlier for even the hottest automaker in the U.S. to sell cars. Subaru Corp. , the only carmaker to boost U.S. sales every year in the last decade, is continuing to offer cheap financing on models including the Outback crossover and Legacy sedan even as rates rise. While those deals look about the same to customers, they’re becoming more expensive for the company, pinching margins in a plateauing U.S. market. “Our basic incentive programs haven’t really changed -- what’s changed is the fact that interest rates have increased so much,” Tom Doll, president of Subaru of America, said in an interview last week at the Chicago Auto Show. With the Fed hiking rates three times last year and forecasting three more in 2018, carmakers are coming under pressure . So far, they’ve been wary of backing away from cheap financing offers, which could cost them market share as U.S. auto sales stop growing. At some point, the cost of dangling ... Full story

13 February