Despite 6.4% Drop in Car Buys, Month Ends on Optimistic Note
Sales of new cars fell 6.4% in November, the auto makers reported Thursday, but stronger than expected sales in the last 10 days of the month buoyed industry hopes for the rest of the year.
Auto sales are being watched closely as an indicator of consumer spending habits in the wake of the Oct. 19 stock market crash. Car sales were noticeably weak in the month immediately after the crash.
“If we didn’t have the final surge in the last 10-day period, car sales (for November) would have been much weaker,” said Christopher Cedergren, an industry analyst with J. D. Power & Associates in Westlake Village. “The (Nov. 21-30) sales indicate that consumers appear to be regaining confidence in the economy, and are beginning to go out and buy cars.”
Cedergren acknowledged that the late November figures may not indicate a trend, but he theorized that consumer confidence is rebounding from the shock of the 508-point drop in the Dow Jones industrial average. “Consumers who were postponing the purchase of a new car in the last 30 days . . . have found that the economy is moving along at a sound pace . . . and have decided to go ahead and make their purchase.”
Added Thomas O’Grady, an auto industry analyst with Integrated Automotive Resources: “The surge (in the final 10 days) had to do with extra new incentives (by the auto makers), and (it also) showed that the world is doing fine even since the stock market crash.” In late November, General Motors, Ford and Chrysler instituted sales incentives including cash rebates on some models.
Sales of new domestically built autos rose 2% in the final 10 days of November, compared to the same period of 1986. Ford’s sales were up 13.9% while General Motors showed a 3.5% gain in the period. Chrysler’s sales, however, were down 1.3%.
Toyota’s sales of its U.S. produced cars increased 12.8%, but Honda and Nissan fared less well. Their 10-day domestic car sales fell 24.6% and 30.9%, respectively.
For the entire month, total U.S. car sales, including imports, fell 6.4% from November, 1986. Sales of domestically built models car sales fell 6.7% while imports were down 5.6%.
GM’s sales for November fell 11.9% while Chrysler’s fell 4.0%, but Ford’s sales remained strong, gaining 3.6%.
Among the major importers, Toyota’s sales dropped 15.1%, Nissan’s sales fell 2.7% and Honda’s sales plunged 19.1%. Dealers blamed the increased value of the Japanese yen against the U.S. dollar.
“We had five price increases (in 1987),” said David Martinez, sales manager at Longo Toyota in El Monte. “We still have a lot of the market, but shoppers buy a little more wisely now. . . . It takes shoppers two or three visits (before they decide) to buy a car.”
“November was very unpredictable, very spotty.” said Don Louis, of Len Cormier Chevrolet in Long Beach. “There’s no rhyme or reason for what we did. . . . Last weekend was the best weekend of the month. . . . I think it has a lot to do with consumer confidence.”
AUTO SALES
% NOVEMBER 1987 1986 change GM 225,110 255,516 -11.9 Ford 150,693 145,425 +3.6 Chrysler 72,677 75,690 -4.0 Honda U.S. 24,913 30,308 -17.8 VW U.S.* 3,519 4,906 -28.3 Nissan U.S. 4,906 6,954 -29.5 Toyota U.S. 3,627 2,275 +59.4 Mazda U.S.* 528 -- -- DOMESTIC 485,973 521,074 -6.7 Toyota Imp. 51,254 60,387 -15.1 Nissan Imp. 31,329 32,186 -2.7 Honda Imp. 36,081 44,599 -19.1 Mazda 18,572 18,134 +2.4 Subaru 13,443 11,819 +13.7 VW Imp. 9,229 8,707 +6.0 Volvo 6,447 7,771 -17.0 Hyundai 18,074 15,925 +13.5 Mitsubishi 4,683 4,304 +8.8 Others 56,688 56,688 0.0 IMPORTS* 245,800 260,500 -5.6 Total U.S. 731,773 781,574 -6.4
*Estimate
