Imports Surge but Car Sales Fall 4.9% Overall
Despite a strong showing by imports, new car sales fell 4.9% in November as domestic auto makers continued a two-month slump, according to figures released Wednesday.
Foreign makes accounted for 32.4% of all new cars sold last month, just below the record 32.5% set in August, 1982.
Imports sold at a record pace in November as dealers delivered about 247,000 cars, 23.6% more than a year ago. Sales of domestic makes, meantime, fell 14.1% last month, prompting General Motors to follow Chrysler’s lead by offering cut-rate financing on a few models in an effort to renew consumer interest.
Auto analysts said the boom in import sales was due to the increased availability of Japanese cars since the easing of Japan’s export quotas last April.
“Consumers are buying as many Japanese cars as allowed under the quota system,” said David Healy, an auto industry analyst with the New York investment firm Drexel Burnham Lambert. He added, however, that an increase in import sales is “a bite taken from domestic sales.”
Sales of domestic makes have slumped since the end of their sales incentive programs, principally cut-rate financing, in early October. Those programs, designed to clear inventories of 1985 models, sent domestic sales skyrocketing to record levels in August and September.
In November, domestic auto makers sold 515,802 new cars, down from the 600,692 sold in the same month last year. For the final 10 days of the month, sales began to pick up slightly, however, and were down a scant 1.2% over the 1984 period.
Analysts said the late month rally indicates that the “pay-back” from last summer’s incentives is easing, although they expect its effect to linger through next year.
“The impact of the incentives is diminishing, although it will continue to be felt for some time,” said Harvey Heinbach, an auto analyst with Merrill Lynch. “When the programs were announced in late August, people that were planning to buy a car sometime this year bought early to take advantage of them.”
In an attempt to accelerate the recovery, several domestic manufacturers have jumped back into the incentive game. But analysts noted that the new plans are much more limited than those of last summer.
Chrysler and American Motors are offering rebates and reduced-rate loans on some models. GM’s program consists of 8.6% financing on its J-body subcompact cars, and it is scheduled to expire at the end of the month. Ford has not announced any new incentives.
“Dealer inventories are building up rapidly,” Heinbach said. “As a result, the domestic manufacturers either have to cut back production or stimulate sales. And cutting back production is a last resort because it’s so costly.”
On a seasonally adjusted basis, domestic new cars sold at an annual rate of 6 million and imports sold at an annual rate of 3.3 million, bringing the total annual rate for the month of November to 9.3 million. That is the lowest annual rate for any month this year.
The annual rate is a reflection of the number of cars that would be sold if November’s pace were to continue for a full year.
Auto Sales
November 1985 1984 % change GM 293,884 328,378 -10.5 Ford 122,341 159,485 -23.3 Chrysler 68,459 81,743 -16.2 AMC 7,747 14,905 -48.0 VW U.S. 6,120 4,151 +47.4 Honda U.S. 11,240 12,030 -6.6 Nissan U.S. 6,011 -- -- DOMESTIC 515,802 600,692 -14.1 Toyota 49,187 47,346 +3.9 Nissan 49,701 38,390 +29.5 Honda 37,565 31,985 +17.4 Mazda 22,802 12,942 +76.2 Subaru 15,526 11,740 +32.2 Volvo 7,670 7,273 +5.5 VW Imports 9,762 6,593 +48.1 Others 54,787 45,427 +20.6 IMPORTS* 247,000 201,696 +23.6 TOTAL U.S. 762,802 802,388 -4.9
*Estimate
