Mid-November Level Falls 27.2% From Last Year : U.S. Car Sales Continue to Decline
Domestic car sales, still hurting as a result of the incentive-induced sales boom of late summer, fell 27.2% in mid-November, the seven U.S. auto makers reported Monday.
The companies said they sold 184,327 new cars from Nov. 11 to 20, down from 225,196 in the comparable 1984 period. It was the fifth consecutive period of declining sales for the domestic manufacturers.
Auto analysts said the recent sales drought is the result of record-setting sales in late August and September, when most companies offered cut-rate financing and other incentives to sell leftover 1985 models.
“The hangover continues,” commented David Healy, an auto analyst with Drexel Burnham Lambert. “The rebate programs in August and September brought in everybody ready to buy a car in the near future.”
He added, however, that since incentive programs traditionally take away sales from future periods, an elongated “pay-back” period following a round of extensive incentives is not indicative of a drop in demand for cars.
“It’s too early to say the overall sales rate is declining,” Healy said.
Analysts expect the sales rate to continue to fall below year-ago levels through the end of the year unless another round of broad incentives is introduced.
According to industry observers, General Motors is the most likely candidate to spark another incentive war. With dealer inventories rising and an optimistic production schedule, the No. 1 auto maker is in the best position of the Big Three manufacturers to begin a consumer campaign to boost lagging sales.
GM said sales were off 27.3% in the most recent period, while Ford and Chrysler reported declines of 30.7% and 29.7%, respectively.
On a seasonally adjusted basis, new-car sales in mid-November equaled an annual rate of 5.9 million, down significantly from the annual rate of 8 million recorded in the same period last year. The annual rate is a reflection of the number of cars that would be sold if the mid-November pace were to continue for a full year.
Auto Sales Percentage changes in auto sales for the second 10 days of November are based on daily rates rather than total sales volume. There were nine selling days in the 1985 period and eight selling days in the year-ago period.
Nov. 11-20 Nov. 11-20 % 10-Day 1985 1984 change GM 102,614 125,495 -27.3 Ford 47,236 60,568 -30.7 Chrysler 23,285 29,428 -29.7 AMC* 2,300 4,700 -56.6 VW U.S. 2,306 1,312 +56.1 Honda U.S. 4,302 3,693 +3.4 Nissan U.S. 2,284 -- -- TOTAL 184,327 225,196 -27.2
*Estimate
