GM Has Biggest Slide as Mid-March Auto Sales Sag

Times Staff Writer

Led by a steep decline at General Motors, domestic new car sales dropped 3.9% in the mid-March selling period, the auto makers reported Tuesday.

A total of 217,939 U.S.-built cars were sold during the mid-March 10-day selling period, down from a total of 226,712 in the same period of 1986, the eight domestic producers said.

GM, which has been struggling with poor sales all year, showed the most significant drop of Detroit's Big Three auto makers with a sales decrease of 14.8%.

Tom O'Grady, an auto industry analyst with Integrated Automotive Resources, a Wayne, Pa., research firm, said a key factor in GM's declining sales is a relatively weak incentive program.

"GM has an incentive program that is based on options . . . rather than the car itself. A rebate which is based on options is a weak incentive," he said. GM's Chevrolet and Cadillac divisions in particular need more attractive incentives to boost sales, he said.

By contrast, Ford's sales were up 15.2%, with a total of 67,672 domestic cars. It captured a 31% share of the domestic auto market, up from 25.9% in last year's comparable selling period.

'Very Poor Performance'

General Motors had a 48.4% market share, selling 105,438 cars in the period, down from a 54.6% share in 1986. Chrysler reported a 3.7% sales decline.

On a seasonally adjusted basis, new cars sold at an annual rate of 6.2 million in mid-March, down from the relatively soft 6.4-million rate of a year ago. The annual rate is a reflection of the number of cars that would be sold if the period's sales pace were to continue for a full year.

John Hammond, an analyst with J. D. Power & Associates, an automotive market research firm, stated flatly that sales were terrible. "It was a very poor performance. The low selling rate is significant because car manufacturers recently upgraded their marketing (incentive) campaigns. . . . Analysts expected an annual rate as high as 8 million units."

Hammond speculated that "it won't be much different in the next 10-day sales period. April, May and June are usually the strongest months for sales, but we'll be going into this period with no momentum."

Hammond added that domestic car inventories have increased by 100,000 units, putting additional pressure on dealers to sell them quickly.

Among the smaller car manufacturers, Honda reported that mid-March car sales were up 48%, and Nissan said its sales were up 10%, while Volkswagen's sales were down 35%.

American Motors, meanwhile, said its sales plunged 62.2%. Toyota said it sold 995 U.S.-built cars, during the period; it wasn't producing cars in the United States during the same period last year.

AUTO SALES

Mar. 11-20 Mar. 11-20 % 10-Day 1987 1986 change GM 105,438 123,687 -14.8 Ford 67,672 58,729 +15.2 Chrysler 30,909 32,085 -3.7 Honda U.S. 7,447 5,031 +48.0 AMC* 790 2,100 -62.2 VW U.S.* 1,330 2,047 -35.0 Nissan U.S. 3,358 3,033 +10.7 Toyota U.S. 995 -- -- TOTAL 217,939 226,712 -3.9

*Estimate

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