Domestic auto sales plummeted 51.9% in early September from record sales a year ago, the seven U.S. auto makers reported Tuesday.
But industry experts cautioned that the huge drop does not represent weak sales in the first 10 days of September as much as it reflects heavy auto sales in early September, 1986--when American auto buyers besieged showrooms in search of then-new incentives.
"Even though it's down from last year, the market is still strong because of incentives," said Theodore Sullivan, an automotive analyst with Wharton Econometrics.
Sullivan agreed that although the market is still relatively strong, incentives are not as effective this year as they were last year in enticing customers to the showrooms.
"Consumers are jaded on incentives," he said. Prospective buyers now expect incentives to stay around, he said, and they are less likely to rush out to buy before the incentives expire.
At the end of August, 1986, the Big Three auto makers introduced 2.9% financing on two-year car loans. This year the major auto manufacturers are offering 1.9% rates on two-year loans.
New domestic cars sold at an annual selling rate of 8.2 millions units in the first 10 days of September, an upswing from a 7.2-million rate for the year until Sept. 1. The annual rate is a reflection of the number of cars that would be sold if the period's pace continued for a full year.
Despite the hardy annual selling rate, new car sales figures reported by the Big Three auto manufacturers showed big minuses. General Motor's sales took a dive of 60.8%, while Ford's sales tumbled 33.0%, and Chrysler's sales plunged 55.6%. Chrysler sales include those of its new subsidiary American Motors.
Among U.S.-built cars produced by foreign manufacturers, Honda's sales rose 1.9%, and Volkswagens sales fell 12.5%. Toyota reported selling 1,398 domestically made vehicles in the September selling period. There are no comparable Toyota sales figures since it started production of the Corolla FX and FX16 models in September, 1986.
Nissan's sales rose 256.4% in the first 10-day period of September. The large sales increase reflects primarily Nissan's recent increase in auto making capacity.
Sept. 1-10 Sept. 1-10 % 10-Day 1987 1986 change GM 91,075 232,252 -60.8 Ford 51,243 76,499 -33.0 Chrysler* 22,659 51,082 -55.6 Honda U.S. 6,835 6,709 +1.9 VW U.S. 1,080 1,234 -12.5 Nissan U.S. 3,222 904 +256 Toyota U.S. 1,398 -- -- TOTAL 177,512 368,680 -51.9