U.S. Auto Makers Post Sales Drop of 4% in Early March
Sales of U.S.-built cars fell 4% in early March, indicating that the manufacturers’ latest round of incentives may not be luring as many buyers as hoped.
In reports released Thursday, the seven U.S. manufacturers said they sold 185,904 new cars in the March 1-10 period, a decline from the 193,621 sold in the comparable 1985 period.
Detroit’s Big Three auto makers recently eased back on the aggressive discount financing programs that they had been offering earlier in the winter, causing industry analysts to predict mediocre sales unless the incentives are sweetened.
The major domestic auto makers, who were offering 7.7% financing, now generally are offering 9.9% programs.
“The message is we need incentives or below-market rates to keep people interested,” said David Healy, an auto analyst with Drexel Burnham Lambert in New York. “And, given current interest rates, the 9.9% financing is not that attractive.”
General Motors, the only domestic manufacturer to report an increase for the period, said its sales were up 1.3%, while Ford and Chrysler said their sales fell 10.9% and 11.6%, respectively.
GM, which had a relatively weak sales showing in early March last year, posted a three-point jump in market share from the 1985 period. The No. 1 auto maker claimed 56.5% of the domestic market, an increase from the 53.5% it held in the period last year.
Ford held 25.6% of the market, down from the strong 27.6% share it claimed in early March last year, while Chrysler’s market share was 13.6%, off slightly from its 14.7% share in the comparable 1985 period.
Of the smaller manufacturers, AMC’s sales were off 32.8%, American Honda’s sales slipped 16.3% and Volkswagen’s U.S.-built car sales were down 12.5%.
Industry analysts noted that the current sales pace is too weak to maintain the strong production schedules of the domestic auto makers but predicted that the car companies will try bolster sales through expanded incentives before making major production cuts.
On a seasonally adjusted basis, domestic new cars sold at an annual rate of 7.7 million in the March 1-10 period, down from the 8-million rate posted in the same period last year but up from the 6.5-million rate of late February.
The annual rate is a calculation of the number of cars that would be sold if a period’s pace were to continue for a full year. Auto Sales
March 1-10 March 1-10 % 10-Day 1986 1985 change GM 104,952 103,604 +1.3 Ford 47,592 53,435 -10.9 Chrysler 25,191 28,483 -11.6 AMC* 1,780 2,650 -32.8 VW U.S. 809 925 -12.5 Honda U.S. 3,786 4,524 -16.3 Nissan U.S. 1,794 -- -- TOTAL 185,904 193,621 -4.0
*Estimate
