Car Sales Post First Gain in Four Months : Strong Showing by GM and Imports in January

Buoyed by a strong sales showing by General Motors, domestic auto makers posted their first monthly sales gain since September, according to industry reports released Tuesday.

But the scant 1.2% increase for U.S. auto makers, who offered bargain financing last month on many cars, was dwarfed by record-level import sales, which increased 14.3% last month, compared to January, 1985.

All of the major importers reported sales gains for January with the exception of Nissan, which said its sales fell 12%.

As a result, total auto sales--domestics and imports--increased 4.5% to reach an all-time high for the month of January.

Traditionally Slow Month

Although January is traditionally a slow month for import sales due to quota restraints, foreign makes claimed 27.1% of the U.S. market.

“In the first quarter, import sales are held down by quotas, since the Japanese fiscal year ends in March and the shipments dry up,” said Harvey Heinbach, an industry analyst with Merrill Lynch. “Despite sales being up, import dealers are not selling as many cars as they could.”

The 1.2% increase in sales of new cars by U.S. auto manufacturers, from 635,904 units last month to 628,037 units in January, 1985, was due almost entirely to a 3.7% jump in sales by GM, the No. 1 auto maker.

Despite the highly competitive incentive programs that most of the domestic auto makers have in effect, Volkswagen U.S. was the only other domestic manufacturer to post a sales gain, up 7.5% for the month.

Auto analysts pointed out that GM’s market share, which had been hovering at below-average levels for more than a year, rebounded in January to more than 43% of the total U.S. market. GM’s gain in market share came at the expense of other domestic auto makers, particularly Chrysler and Ford, the companies previously responsible for GM’s loss of market share.

Ford’s Inventories Down

“GM’s market-share recovery is primarily the function of GM being aggressive with incentives and production,” Heinbach said. He added that Ford is suffering from depleted inventories of its popular models, especially its new Taurus and Sable.

In the last 10 days of January, domestic sales of new cars fell 2.5%, completing an up-and-down cycle that had persisted throughout the month.

Analysts noted, however, that 10-day sales periods are susceptible to fluctuations and that the month-end figures were about in line with expectations.

On a seasonally adjusted basis, domestic new cars sold at an annual rate of 8.6 million in January, up slightly from the 8.5-million annual rate recorded in January, 1985. Imports sold at an annual rate of 3 million for the month, up from the 2.5-million rate of a year ago.

The annual rate is a reflection of the number of cars that would be sold if a month’s sales pace were to continue for a full year.

AUTO SALES

% January 1986 1985 change GM 76,353 362,780 +3.7 Ford 49,380 150,762 -0.9 Chrysler 78,195 85,260 -8.3 AMC 6,389 9,987 -36.0 VW U.S. 6,321 5,882 +7.5 Honda U.S. 13,263 13,366 -0.8 Nissan U.S. 2,749 -- -- DOMESTIC 635,904 628,037 +1.2 Toyota 45,285 42,951 +5.4 Nissan 37,337 42,430 -12.0 Honda 37,018 35,938 +3.0 Mazda 18,993 12,079 +57.2 Subaru 16,740 11,401 +46.8 Volvo 11,684 9,928 +17.7 VW Imports 10,505 9,861 +6.5 Others* 59,138 42,453 +39.3 IMPORTS* 236,700 207,041 +14.3 TOTAL U.S. 872,604 835,078 +4.5

*Estimate