Early February Car Sales Fall 1.3% From 1986 Period
Domestic new car sales fell 1.3% in early February, compared with the same period in 1986, the auto manufacturers reported Friday. But the slight decline represented a recovery from last month when the sale of U.S.-built cars slid 25.8% from the previous year.
Industry experts attributed the improvement in sales to the diminishing negative effect of the sales boom in December that was sparked by consumers buying before the new tax law eliminated sales tax deductions.
In addition, analysts pointed to new cut-rate financing incentives and extended warranties that many of the companies introduced recently.
“We were looking for improvement but sales are even better than expected,” said Harvey Heinbach, an industry analyst with Merrill Lynch. “Apparently the worst of the payback that occured last month as a result of tax reform is over and the incentives are getting people back into dealer showrooms.” He added, however, that the current sales pace may be difficult for the manufacturers to maintain throughout the month.
General Motors reported the largest decline of Detroit’s Big Three auto makers, down 9% in the Feb. 1-10 period from the comparable 1986 period. Chrysler also said its sales were down for the period, off a scant 1.7% from a year ago, but Ford reported an increase of 8.2% for the period.
Among the smaller manufacturers, American Motors said its sales were down 52.7%, Volkswagen of America reported a 37.8% decline and Nissan U.S. said sales of its domestically produced cars were up 39.5%.
American Honda reported an increase of 118.3% for the period. Analysts noted, however, that the figure is distorted since Honda’s sales increase is largely a reflection of increased production at its Marysville, Ohio, plant. Last month, for instance, Honda’s total U.S. sales, including imports, declined 9.8% even though its sales of domestically produced cars rose 50%.
On a seasonally adjusted basis, U.S.-built new cars sold at an annual rate of 8.5 million in the early February period, down slightly from the 8.6 million annual rate posted for the comparable 1986 period. 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.
AUTO SALES
Feb. 1-10 Feb. 1-10 % 10-Day 1987 1986 change GM 90,652 99,621 -9.0 Ford 46,395 42,870 +8.2 Chrysler 21,744 22,113 -1.7 Honda U.S. 7,539 3,453 +118.3 AMC* 850 1,800 -52.7 VW U.S.* 714 1,147 -37.8 Nissan U.S. 1,908 1,368 +39.5 Toyota U.S. 332 -- -- TOTAL 170,134 172,372 -1.3
*Estimate
