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Incentive Plans May Be Losing Steam; Car Sales Rise Just 0.8%

Times Staff Writer

Sales of new U.S.-built cars rose a scant 0.8% from a year ago in early June, the auto makers reported Friday. Analysts said it was an indication that current sales incentive programs are losing steam.

Still, the sales pace for the first 10 days of the month was the fastest recorded in the period since 1978. According to reports released Friday, domestic auto makers sold 218,247 new cars in the June 1-10 period, compared to 216,565 sold in the same period of 1985.

Discount incentive programs offered by the major U.S. auto manufacturers have helped boost domestic car sales since they were introduced in mid-April. But the effectiveness of the incentives has been diminishing during the past several sales reporting periods.

“The stimulus to sales provided by the incentives is fading faster than expected,” John Hammond, an auto analyst with Data Resources, said Friday. He added, however, that while the current sales pace is healthy, the auto makers will most likely have to continue offering consumers some form of incentives after the current programs expire in July in order to keep sales in line with production.

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Chrysler, the No. 3 domestic car maker, continued to post the strongest sales performance of Detroit’s Big Three, reporting that its sales rose 15.7% in early June. General Motors said its sales were off 0.5%, and Ford reported a 5.2% decline.

Among the smaller manufacturers, American Motors’ sales were down 38.6%, American Honda’s were up 69.9% and Volkswagen of America’s rose 101.6%. Nissan U.S., which has halted production at its Smyrna, Tenn., plant in order to retool, did not release sales figures for the period.

On a seasonally adjusted basis, domestic new cars sold at a strong annual rate of 8.6 million in the early June period. The annual rate indicates the number of cars that would be sold if a period’s sales pace were to continue for a full year.

Auto Sales

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June 1-10 June 1-10 % 10-Day 1986 1985 change GM 28,977 129,594 -0.5 Ford 50,088 52,846 -5.2 Chrysler 32,609 28,184 +15.7 AMC* 1,450 2,360 -38.6 VW U.S. 1,988 986 +101 Honda U.S. 3,135 1,845 +69.9 Nissan U.S. NA 750 -- TOTAL 218,247 216,565 +0.8 * Estimate


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