U.S. New Car Sales Tumble 23.5% in Mid-April Period

U.S. auto makers reported one of their steepest sales declines for the year Wednesday as new car sales slipped 23.5% in mid-April from the same period a year ago.

Auto analysts said that while the period’s sales pace was lagging, the declines were exaggerated by the exceptionally strong sales posted in the 1985 period.

“Mid-April was one of the best periods last year,” said David Healy, an industry analyst with Drexel Burnham Lambert, “so a year-to-year comparison makes it look worse than it actually is.”

The seven domestic manufacturers said they sold 193,772 units, or a daily average of 24,222, in the April 11-20 period, compared to the 285,063, or a daily rate of 31,674, sold in the same period last year.

Incentive Programs Take Toll

Since there were eight official selling days in the April 11-20 period this year and nine selling days in the comparable 1985 period, year-to-year percentage changes are based on a daily selling rate.

Healy added that sales were hurt when some auto makers briefly halted and then enhanced their incentives programs during mid-April. “The auto companies have succeeded in training buyers not to enter dealer showrooms unless there are special deals,” Healy said.

GM, Ford and Chrysler all currently have new incentive programs in place, and analysts expect their sales to pick up slightly as they enter the spring selling season. Industry observers note, however, that GM’s 2.9% price increase, which became effective April 14, could cost the No. 1 auto maker some of its market share. Ford and Chrysler have both announced that they will not follow GM’s lead by raising prices.

American Honda and Nissan U.S.A. were the only domestic manufacturers to report sales increases for the period.

On a seasonally adjusted basis, domestic new cars sold at an annual rate of 7.1 million in mid-April, down from the very high 9.3-million rate recorded in the period last year and below this year’s average rate of 7.9 million. The annual rate is a calculation of the number of cars that would be sold if a period’s sales pace were to continue for a full year.

AUTO SALES

Percentage changes in auto sales for the second 10 days of April are based on daily rates rather than total sales volume. There were eight selling days in the 1986 period and nine selling days in the year-ago period.

April 11-20 April 11-20 % 10-Day 1986 1985 change GM 113,360 164,034 -22.2 Ford 46,557 74,636 -29.8 Chrysler 25,864 36,732 -20.8 AMC* 1,600 3,425 -47.5 VW U.S. 1,683 2,133 -11.2 Honda U.S. 3,650 3,530 +16.3 Nissan U.S. 1,058 573 +106.2 TOTAL 193,772 285,063 -23.5

*Estimate