Cut-Rate Loans, Rebates Credited : U.S. Car Sales Leap 17.8% in Mid-August
Strong sales incentive programs brought droves of car buyers to dealer showrooms in mid-August, and sales of new domestic models rose 17.8% from the year before, the auto makers reported Tuesday.
“The strength is the incentives,” said Theodore Sullivan, an auto analyst from Wharton Econometrics. Next month may be even stronger, he said, “because consumers will jump before the incentives (are scheduled to) expire.”
The major U.S. auto makers have been offering 1.9% rates on two-year car loans, the lowest ever. Rates on longer loans range from 3.9% to 8.9%.
Cut-rate loans and rebates at Ford and General Motors dealers are scheduled to expire Sept. 30. Chrysler’s program is open-ended, but Sullivan predicted that its incentives will end around the same time.
GM sales rose 18.4% in the 10-day period ended Aug. 20; Ford’s increased 24.1%.
Chrysler, which completed its acquisition of American Motors on Aug. 1, showed a 20.1% sales drop for the period.
Thomas O’Grady, an auto analyst of Integrated Automotive Resources, a Wayne, Pa.-based research firm, attributed some of Chrysler’s lackluster sales to the fact that it is not advertising as heavily as Ford and GM, and is concentrating on truck sales instead.
Chrysler’s domestic truck sales, including AMC’s Jeep line, were up 32% in mid-August.
Sales of U.S.-produced Hondas rose a dramatic 82.1%, while sales of U.S.-assembled Volkswagens dropped 28.9%.
Nissan sold 5,527 domestically built vehicles, and Toyota sold 1,188 U.S.-made models. Neither Nissan nor Toyota produced vehicles in this country a year ago.
On a seasonally adjusted basis, new cars sold at a rate of 9.2 million units. The annual rate is a reflection of the number of cars that would be sold if the period’s sales pace continued for a full year.
AUTO SALES
Aug. 11-20 Aug. 11-20 % 10-Day 1987 1986 change GM 126,887 107,163 +18.4 Ford 66,907 53,935 +24.1 Chrysler** 26,200 32,788 -20.1 Honda U.S. 7,563 4,154 +82.1 VW U.S.* 1,594 2,242 -28.9 Nissan U.S. 5,527 14 *** Toyota U.S. 1,188 -- -- TOTAL 632,548 206,234 -8.3
*Estimate **Includes AMC data ***39.378%
