If only the banks followed the same rules that the car companies do. Then the bank would give you $30,000 up front to help convince you to buy a new house, and you wouldn't have to make any payments on it for five years. If that sounds like a crazy way to do business, it is -- and yet it has become the norm in the auto industry. By now, the incentive habit has become so big that the Big Three car makers can't seem to kick it, even as the industry equivalent of crack cocaine continues to eat into their balance sheets.

Wednesday's auto sales numbers could be read in a couple of different ways. For example, General Motors saw its year-over-year sales climb 13 per cent in September -- but that was compared with a fairly poor month last year, and in the year to date the auto maker's sales were still 2.8 per cent lower than last year. GM also continues to be the king of incentives, a strategy that is likely to keep pressure on the giant company's profit.

In fact, despite a lot of talk in the industry over the past six months that the incentive train was slowing down, that appears not to be. Lehman Brothers said in a recent report that GM's 2004 model year vehicles carry an average of $3,000 (U.S.) in incentives -- twice what the comparable vehicles did last year. The firm says that, as a result, the net price for GM's vehicles is expected to fall by 2 per cent.

GM, of course, is hoping that auto sales will continue to grow as a result of these favourable pricing deals. Like its fellow U.S. auto makers, the company is also looking for ways to reduce its already depleted headcount in order to maintain its profit margins. Ford has said it will cut 12,000 jobs worldwide, and some analysts say industry-wide layoffs will likely reach 50,000.

Ford's sales for September were effectively flat over the same month last year, while DaimlerChrysler's sales fell by 15 per cent year-over-year. In what is essentially the reverse of GM's results, analysts said that sales at DaimlerChrysler were weak because it didn't offer enough incentives on 2004 models, but offered more on its older 2003 models. Industry watchers said the company also suffered from a lack of compelling new vehicles compared with other auto makers.

And despite the fact that GM recently increased its incentive plan and extended it to its newer models, with Ford and DaimlerChrysler expected to follow, North American sales for the Big Three are expected to fall again next year, just as they have this year. In the United States, the three auto makers slid to less than 60 per cent of the market for the first time in August -- one of the strongest months in recent memory -- and in Canada they are under 50 per cent.

Incentives are high and climbing higher, while sales and market share are falling. And the Asian auto makers? The opposite. Companies such as Honda, Toyota and Nissan offer incentives of about $1,300 per vehicle, compared with Detroit's $3,687 per vehicle, and yet their share of the U.S. market climbed in August to 31.4 per cent from 28.8 per cent . Toyota's sales rose 15 per cent in September, and Nissan's sales rose 25 per cent thanks in part to its minivan.

One of the biggest risks for the U.S. car companies is that their incentive offers have simply borrowed from the future in order to keep revenue propped up during the recession. The risk is that even as the economy starts to pick up, there may be no recovery in auto sales. Credit Lyonnais Securities has GM and Ford rated a "reduce" in part as a result of this risk. "We do not expect the traditional level of pent-up demand to accompany this economic recovery," the firm said, adding that it expects "pricing will remain under pressure."

As for DaimlerChrysler, some analysts have effectively written the company off. UBS Securities rates the company a "reduce," saying in a recent report that it expects only modest volumes on the company's proposed new models, and that any benefit from them will be more than wiped out by increasing competitive pressures. UBS said that it sees the auto maker boosting its incentives to try to maintain market share in traditional segments such as trucks and minivans, and that this will eat into the company's weak bottom line.

Sales that have been temporarily boosted by an orgy of incentives, but can't mask a continuing market share decline, not to mention steady profit erosion -- sounds like an industry with self-destructive tendencies. Too bad there's no such thing as a detox program for auto makers.