Domestic Car Sales Skid Despite Discounts, Rebates

Despite the auto industry’s efforts to revive the weakening car market with a new round of cash rebates and discount financing programs, U.S. car sales fell 8.3% in the first 10 days of 1986, the seven domestic manufacturers reported Tuesday.

The U.S. car makers said they sold a total of 174,954 passenger cars during early January, down sharply from the 190,869 level posted during the first 10 days of January, 1985. All of the major U.S.-based auto makers reported significant sales declines, even though they all began promotional campaigns in late December in an effort to reduce their growing inventories of unsold cars.

Among Detroit’s Big Three auto makers, Chrysler posted the biggest decline; the firm said its sales fell to 20,729 units, down 16.1% from last year’s 24,699. General Motors, meanwhile, said its sales declined to 107,015, down 4.4% from 111,905 units last year, while Ford reported sales of 40,057, down 11.7% from 1985’s level of 45,362 units.

But even the U.S. operations of the Japanese auto makers were not immune to the winter slump. Honda said sales of its U.S.-built Accords fell 29.3% during early January, from 4,478 last year to 3,167 in the most recent selling period.

In fact, the only auto maker to report a sales increase was Volkswagen of America, which posted a 3.3% gain to 1,193 units, up from last year’s 1,155.

The early January performance suffered by comparison with the first 10 days of last year, when sales were abnormally strong. That led some analysts to dismiss the big percentage declines in sales as insignificant.

Analyst Thomas O’Grady, president of Integrated Automotive Resources, a Wayne, Pa.-based research firm, noted that this year’s sales were the second best for the period in 10 years--bested only by 1985’s performance.

He added that the seasonally adjusted annual rate of sales for the period--8.4 million units, down from 1985’s rate of 9.1 million units--was still healthy.

The annual rate is a reflection of the number of cars that would be sold if the early January pace were to continue for a full year.

Some analysts also warn that it is still too early to tell whether consumer demand for new cars has significantly weakened, but they do believe that the imports are rapidly eating away at the domestics’ share of the market.

Auto Sales

Jan. 1-10 Jan. 1-10 % 10-Day 1986 1985 change GM 107,015 111,905 -4.4 Ford 40,057 45,362 -11.7 Chrysler 20,729 24,699 -16.1 AMC* 1,550 3,270 -52.6 VW U.S. 1,193 1,155 +3.3 Honda U.S. 3,167 4,478 -29.3 Nissan U.S. 1,243 -- -- TOTAL 174,954 190,869 -8.3

*Estimate

Los Angeles Times