Incentives Take Hold; Car Sales Climb 12.1%

Domestic car sales rose 12.1% in early August, boosted by a new round of sales incentives initiated last week by General Motors and quickly imitated by Ford and Chrysler.

But auto analysts warned that it is still too early to evaluate the success of the cut-rate financing and rebates. “Seasonal factors have overstated to a degree the surge in auto sales in the first 10-day period,” said John Hammond, an analyst with J.D. Power & Associates, an automotive research firm.

“Last year’s sales were down quite a bit,” added Thomas O’Grady, an automotive analyst with Integrated Automotive Resources. He attributed some of the increases to slow sales in early August, 1986.

In Southern California, domestic auto dealers say the incentives are having some effect.

“They make ripples in an otherwise still pond,” said Bob Schultz, general manager and part owner of Kelly Ford in Orange. “I don’t care for them, because all they do is take business from another period of time, and then what do you do?”

“Sales are up, but they’re not up as far as they were last year,” said Scott Gunderson, general manager and part owner of Gunderson Chevrolet in El Monte.

“Normally our weekday business is good, and I can only say that since Monday, it’s better,” said Larry Lowenberg, general sales manager at Crown Dodge in Ventura.

“More people are coming in and looking at the cars, and because of the fact that interest rates are so low--(a loan) costs less for four years than it used to cost for one year--people are buying,” said George Weigle, general sales manager at Rancho Oldsmobile in San Diego.

“The game’s the same all around town,” said Ken Austin, general sales manager at Pete Ellis Dodge in Southgate. The new incentives have produced a few extra phone calls but no increase whatever in showroom traffic or sales, he added. Sales are down by about 5% from August last year, he said.

“Our sales are up (but) not as good as they were a year ago,” added Hal Ballon, general sales manager at Barish Chrysler Plymouth in West Los Angeles.

Times Staff Writer Keith Bradsher in Los Angeles also contributed to this report.

AUTO SALES

Aug. 1-10 Aug. 1-10 % 10-Day 1987 1986 change GM 91,582 78,355 +16.9 Ford 49,402 41,435 +19.2 Chrysler 17,568 26,674 -34.1 Honda U.S. 8,421 4,447 +89.4 VW U.S.* 646 1,118 -42.2 Nissan U.S. 2,195 6 ** Toyota U.S. 568 -- ** TOTAL 170,382 152,035 +12.1

* Estimate. ** Not Comparable