New-Car Sales Drop 10% in Early October : Ending of Cut-Rate Financing Plans Cited

Sales of new U.S.-built cars dropped 10.1% in early October, the auto makers reported Tuesday, as the summer sales boom fueled by cut-rate financing offers waned.

The 7.7% and 7.5% financing programs offered by most of the U.S. auto manufacturers on their leftover 1985 models expired early this month. Although a drop in sales was expected, auto analysts warned that the early October showing was not totally representative, since the sales incentives were still in effect for several days during the latest period.

And, while General Motors, Ford and American Motors last week introduced new campaigns featuring 8.8% financing on a limited number of their 1985 and 1986 models, auto analysts do not expect those programs to offset the anticipated sales slump.

“People that were planning to buy in October bought in September to take advantage of the incentives,” said Tom O’Grady, president of Intergrated Automotive Resources, an auto industry research firm.

Chrysler was the only one of the Big Three auto makers to report an increase in the Oct. 1-10 period. The No. 3 domestic manufacturer said its sales were up 39.2% for the period, an increase that analysts attribute partially to the fact that Chrysler’s incentive program did not expire until Oct. 5.

Oct. 1-10 Oct. 1-10 % 10-Day 1985 1984 change GM 106,549 125,121 -14.8 Ford 49,004 64,192 -23.6 Chrysler 38,394 27,574 +39.2 AMC * 2,465 3,650 -32.5 VW U.S. 1,508 1,052 +43.3 Honda U.S. 2,060 3,203 -35.7 Nissan U.S. * 2,022 -- -- TOTAL 202,002 224,792 -10.1

*Estimate