Imported Car Sales Up as Domestics Fall
Imports claimed 30.6% of the U.S. car market in October, their highest share since August, 1982, while domestic auto makers, still feeling the effect of the ending of their incentive programs, said their sales fell 13.2%.
Sales of imported cars rose 24.5% in October to an estimated 264,000 units from 212,000 a year earlier. The increase was not enough to offset the decline in domestic sales, however. According to reports released Tuesday, a total of 862,363 new cars were sold in October, down 4.3% from the 901,563 sold last year.
Auto analysts attributed the weak showing by U.S. manufacturers to an artificially high sales pace in August and September that was fueled by rebates and discount-financing incentives. Detroit’s Big Three auto makers began the programs in the late summer in an effort to clear dealer inventories of leftover 1985 models before the introduction of the 1986 models in October.
“The weakness in sales (for October) is a result of the third-quarter incentive programs,” said Ted Sullivan, an auto analyst with Data Resources. “The incentives induced a lot of people that might have purchased a car during the fourth quarter into buying in the third quarter.”
He added that the programs might have been “too successful” and that domestic sales should stay at the current level for the remainder of the year, unless another round of broad-based incentives are introduced.
Although imports suffered a decline in market share during the incentive programs--down to 21.3% of the market in September--analysts said the recent strong sales performance by imports indicates that they were not hurt by the programs.
“Import sales are booming along,” said David Healy, an analyst with Drexel Burnham Lambert. “Rebates did not capture any sales from the imports.”
Of the major domestic auto makers, only Chrysler reported an increase for the month. The No. 3 manufacturer said its sales were up 8.5%, while General Motors and Ford reported declines of 13.2% and 26.9%, respectively.
“When sales are pushed above normal levels, as happened in September, pay-back periods and low inventories follow,” said Louis Lataif, vice president of sales operations for Ford.
However, he added, sales were improving late in the month, and he expects them to continue to do so as inventories are replenished.
Auto Sales %
October 1985 1984 change
GM 325,572 375,075 -13.2 Ford 140,283 192,012 -26.9 Chrysler 98,642 90,891 +8.5 AMC 9,852 14,092 -30.0 VW U.S. 6,370 4,210 +51.3 Honda U.S. 10,691 13,283 -19.5 Nissan U.S. 6,953 -- -- DOMESTIC 598,363 689,563 -13.2 Toyota 60,554 49,787 +21.6 Nissan 44,679 42,059 +6.2 Honda 42,559 35,177 +21.0 Mazda 20,254 15,065 +34.4 Subaru 16,112 12,090 +33.3 Volvo NA -- -- VW Imports 11,759 5,850 +101 Others* 68,083 51,972 +31.0 IMPORTS 264,000 212,000 +24.5 TOTAL U.S. 862,363 901,563 -4.3
*Estimate Volvo did not provide information this month
