Domestic Car Sales Edge Up 2.3% in Mid-October

Sales of domestically built new cars rose slightly in mid-October, compared to the year before, but analysts said Thursday that demand remains weak as consumers react to the end of cheap financing deals that boosted car sales to record levels in September.

The seven U.S. auto makers said they sold 166,445 cars in the Oct. 11-20 period, up 2.3% from the same period last year but down from 247,623 in the first 10 days of the month. Most of the discount financing incentives that the major domestic manufacturers were offering on leftover 1986 models expired Oct. 8.

The year-ago period’s sales were also hurt by the end of sales incentives.

“Mid-October’s soft sales are a carbon copy of last year,” said Ted Sullivan, an industry analyst with Chase Econometrics. “Incentive programs borrow sales from the future. And sales were suffering through the same post-incentive period last year.”

Sullivan said he expects sales to remain soft through the end of the year unless the auto makers revive the pace with another round of incentives. Given current production schedules, he added, manufacturers will be forced either to prop up sales with another consumer campaign or reduce output to prevent a backlog of unsold cars.

On a seasonally adjusted basis, U.S.-built cars sold at a feeble annual rate of 5.8 million in the Oct. 11-20 period, up slightly from the 5.4-million annual rate in the period last year. In September, when the incentive programs were in full force, the annual rate rocketed to as high as 17 million.

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

Of Detroit’s Big Three auto makers, only General Motors posted a decline. The No. 1 manufacturer said its sales were down 8.3% from a year ago, while Ford and Chrysler reported increases of 14.5% and 21%, respectively.

American Honda’s sales were up 24.3% over the comparable 1985 period, American Motor’s sales fell 35.1%, Volkswagen of America’s were off 1.3% and Nissan’s U.S. sales increased 7.1%.

Auto Sales

Oct. 11-20 Oct. 11-20 % 10-Day 1986 1985 change GM 81,564 88,566 -8.3 Ford 41,875 36,566 +14.5 Chrysler 31,781 26,262 +21.0 AMC* 1,850 2,850 -35.1 VW U.S. 1,426 1,445 -1.3 Honda U.S. 5,987 4,815 +24.3 Nissan U.S. 1,962 1,832 +7.1 TOTAL 166,445 162,726 +2.3

*Estimate