Domestic Auto Sales Off 16.8% in Mid-October
Sales of domestic new cars fell 16.8% in mid-October from the year before, the auto makers said Wednesday, reflecting the expiration of most of the incentives that sparked record sales last summer.
The seven domestic auto manufacturers sold 162,726 new cars in the Oct. 11-20 period, or 20,342 a day, compared to 220,112, or 24,457 a day, in the same period last year.
Year-to-year percentage changes are based on the daily sales rate; there were eight selling days in the period this year and nine a year ago.
Auto analysts attributed this year’s drop to the ending of sales incentives early this month. The programs consisted mainly of discount financing on leftover 1985 models.
“The impact of the incentives ending is 90% of the explanation for the fall in sales,” said Harvey Heinbach, an auto analyst with Merrill Lynch in New York.
Heinbach added that he expects domestic sales to remain at the current level for the remainder of the year “barring another round of significant incentives,” which, he noted, was possible should dealer inventories rise to unacceptable levels.
GM, Ford and AMC currently are offering low financing rates on a limited number of models, but analysts said the programs are not broad enough to have a major effect on sales.
Chrysler, for the second consecutive period, was the only one of the Big Three auto makers to report an increase. The No. 3 domestic manufacturer said its sales rose a scant 0.6% in the second 10-day period this month, while GM and Ford said their sales were off 17% and 32.8%, respectively.
On a seasonally adjusted basis, new-car sales in mid-October equaled an annual rate of 5.5 million, in line with the 6.4-million rate recorded earlier this month but down considerably from September’s annual rate of 10.8 million.
The annual rate is a reflection of the number of cars that would be sold if a period’s sales pace were to continue for a year.
Auto Sales Percentage changes in auto sales for the second 10 days of October are based on daily rates rather than total sales volume. There were 8 selling days in the 1985 period and 9 selling days in the year-ago period.
Oct. 11-20 Oct. 11-20 % 10-Day 1985 1984 change GM 88,956 120,566 -17.0 Ford 36,566 61,211 -32.8 Chrysler 26,262 29,377 +0.6 AMC * 2,850 4,175 -23.3 VW U.S. 1,445 1,123 +44.8 Honda U.S. 4,815 3,660 +47.9 Nissan U.S. * 1,832 -- -- TOTAL 162,726 220,112 -16.8
*Estimate
