Car Sales Drop 26.1% in Month Despite Incentives

Sales of new cars in September fell 26.1% from the year before, as buyers appeared to weary of massive sales incentives offered by the major auto makers.

“The relative weakness . . . reflects consumers holding back a little bit,” said Harvey Heinbach, an analyst with the Merrill Lynch investment firm in New York. “The incentive campaigns aren’t as productive as they were last year, (and) consumers (have been) spending more than they’ve been earning, so we’re seeing a little bit more conservative behavior among consumers right now.”

The industry--including imports and domestics--sold 899,508 cars last month, compared to 1.22 million in September, 1986. Sales of U.S.-built models fell 33.7% in September, while sales of imports dipped 2.3%.

Despite such incentives as 1.9% interest rates on two-year car loans, sales of the Big Three auto makers plummeted. General Motors’ sales dropped 40.8%, Chrysler’s sales fell 47.7% and Ford’s sales fell 17.5%.

Domestic models produced by foreign companies showed gains. Nissan’s sales rose 145.5%, reflecting expanded capacity at its Tennessee plant, and Honda’s sales rose a scant 0.8%.

Toyota sold 4,956 U.S.-built cars, its best domestic sales month to date. There were no comparable figures for 1986, since Toyota began U.S. production at a plant in Fremont, Calif., late last year.

Among imports, three manufacturers posted slight gains. Toyota’s sales rose 3.4%; Honda’s sales rose 10.2%, and Subaru’s sales jumped 17.4%. Nissan showed a drop of 25% compared to September, 1986.

On a seasonally adjusted basis, the September sales amounted to an annual rate of 7.7 million cars. 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.

September also marked the end of the 1987 model year, which began in October, 1986. During the 1987 model year, the industry sold 10.5 million cars, down 5.9% from 1986 model year sales of 11.2 million.

Sales of domestically built cars fell 8.9% in the 1987 model year while sales of imports rose 1.6%.

Of the Big Three auto makers, only Ford’s sales rose in the model year ended Sept. 30. Ford posted a sales increase of 5.4%, while GM’s sales fell 18.3% and Chrysler’s sales dropped 17.7%.

AUTO SALES

% September 1987 1986 change GM 307,233 519,077 -40.8 Ford 181,077 219,609 -17.5 Chrysler 79,267 151,566 -47.7 Honda U.S. 23,628 23,431 +0.8 VW U.S.* 4,531 6,138 -26.2 Nissan U.S. 12,516 5,098 +145 Toyota U.S. 4,956 -- -- DOMESTIC 613,208 924,919 -33.7 Toyota Imp. 47,002 45,439 +3.4 Nissan Imp. 35,511 47,330 -25.0 Honda Imp. 38,169 34,637 +10.2 Mazda 18,404 21,818 -15.6 Subaru 19,674 16,759 +17.4 VW Imp. 10,850 10,674 +1.6 Volvo 8,603 9,148 -6.0 Hyundai 21,099 20,192 +4.5 Others 86,988 87,061 -0.1 IMPORTS* 286,300 293,058 -2.3 Total U.S. 899,508 1.22 mi -26

*Estimate