Sales of U.S. Autos Off 14.9% in Early July : Slower Demand, Import Gains Cited for Decline

With consumer demand leveling off and imports claiming a larger slice of the U.S. market, the domestic auto makers posted their largest sales decline of the year in the first 10 days of July, the industry reported Monday.

The seven U.S. auto manufacturers said they sold 174,019 cars in the July 1-10 period, down 14.9% from the 179,026 that they sold in the same period last year.

Auto analysts attributed the decline to the increased availability of Japanese cars and the lack of major consumer incentive programs, which the domestic manufacturers used heavily during the first half of the year.

Confirms Downward Trend

“These figures confirm the downward trend (in domestic sales) that began in June,” said Harvey Heinbach, an auto industry analyst with Merrill Lynch. He said that, given the increased competition from Japanese manufacturers, he expects the U.S. auto makers to introduce a new round of sales incentives to prevent sales from deteriorating further.

Responding to the slowdown in its sales, Chrysler announced that it would offer either a $400 rebate or 8.8% financing on its Plymouth and Dodge compact K-cars. The program applies to cars bought on or after July 11.

As a result of the recent poor sales showing by U.S. manufacturers, dealer inventories of domestic models climbed to a four-month high by July 1. On that date, dealers had a 58-day supply of U.S.-built cars in stock. While that is high, it is still below the 60-day supply that is considered normal in the auto industry.

Since there were eight selling days in the period this year and seven last year, the percentages of change are calculated on a daily selling rate basis.

General Motors posted its steepest sales decline of the year during the period, down 18.6% from year-ago levels. The No. 1 domestic auto maker sold 96,410 cars in early July, compared to 103,655 in the 1984 period. Sales by GM accounted for 55.4% of the market in the period, down from the 57.9% share that it held in the same period last year.

While Ford and Chrysler also reported declining sales, down 9.6% and 5.3%, respectively, their market shares rose above last year’s levels. Ford claimed 26.3% of the U.S. market, up from the 24.7% that it held last year, while Chrysler’s sales accounted for 13.6% of the market, an increase over the 12.2% share that it held in the same period last year.

Despite the sales decline, Louis E. Lataif, vice president of sales operations for Ford, said he felt that Ford’s sales were still on target and only suffered by comparison with Ford’s “exceptionally strong” performance in the year-ago period. “Early July sales were quite good and, in fact, exceeded our expectations,” he said.

On a seasonally adjusted basis, new car sales equaled an 8.2-million-unit annual rate. Though not an exceptionally low rate, it is well below the 9.2-million annual rate recorded in early June last year.

Auto Sales Percentage changes in auto sales for the first 10 days of July are based on daily rates rather than total sales volume. There were 8 selling days in the 1985 period and 7 selling days in the year-ago period.

July 1-10 July 1-10 % 10-Day 1985 1984 change GM 96,410 103,655 -18.6 Ford 45,803 44,323 -9.6 Chrysler 23,631 21,827 -5.3 AMC * 3,060 5,400 -50.3 VW U.S. 1,239 1,224 -11.4 Honda U.S. 2,833 2,597 -4.6 Nissan U.S. * 1,043 -- -- TOTAL 174,019 179,026 -14.9