Domestic Car Sales Off 7.3% in Mid-July

Sales of domestic cars fell 7.3% in mid-July from a year ago, the companies reported Wednesday, mainly due to a 13.9% drop by industry leader General Motors.

In addition to posting its third consecutive decline in 10-day sales, the No. 1 auto maker said its share of the market for U.S.-built cars fell from 59.7% in the July 11-20 period last year to 55.4% this year.

Auto analysts said GM’s declining market share could be blamed partially on shortages of several key models. Some of those shortages are traceable to a strike by the United Auto Workers last year.

“GM is not going to sit back and watch its market share diminish,” said Scott Merlis, an auto analyst with Shearson Lehman Bros. He said that, in addition to replenishing its inventory, GM is also likely to respond with an aggressive marketing campaign.

Ford and Chrysler said their sales were up 6.6% and 3.3%, respectively, in the mid-July period. Both companies also reported an increase in market share. Ford sales accounted for 26.2% of the domestic market, while Chrysler claimed a 13.7% share.

On a seasonally adjusted basis, new-car sales equaled an 8.1-million annual rate, down significantly from the strong rate of 9.2 million reported in the period last year.

The seasonally adjusted annual rate is a reflection of the number of cars that would be sold if the mid-July pace continued for a full year.

“Auto sales are sinking to a distinctly lower level,” Merlis said. “But they are still strong.”

Analysts said the overall decline by domestic auto makers was due largely to consumer demand leveling off and accelerating competition resulting from the increased availability of Japanese cars.

In April, the Japanese government significantly increased the number of cars that could be exported to the United States under that nation’s voluntary restraint program, effectively ending several years of severe limits on Japanese sales here.

“Consumers are still enthusiastic about purchasing cars,” said John Hammond, an industry analyst with Data Resources, “but not necessarily domestic cars.”

Foreign manufacturers only report their sales monthly.

Auto Sales

July 11-20 July 11-20 % 10-Day 1985 1984 change GM 120,124 139,587 -13.9 Ford 56,716 53,219 +6.6 Chrysler 29,749 28,791 +3.3 AMC * 3,730 7,280 -48.8 VW U.S. 1,816 2,216 -18.0 Honda U.S. 3,603 2,733 +31.8 Nissan U.S. 989 -- -- TOTAL 216,727 233,826 -7.3

* Estimate