17.7% Decline Belies Recent Car Sales Pace
Sales of U.S.-built cars held steady in mid-December, the companies reported Wednesday, but the results were off 17.7% in comparison to the strong 1986 period when sales were boosted by a rush of tax-conscious buyers.
The eight major domestic auto manufacturers reported sales of 154,148 vehicles in the Dec. 11-21 period, down from 210,654 vehicles in the previous year. In late 1986, many buyers rushed to take advantage of deductions for sales tax paid on car purchases before they were eliminated by the new tax law that took effect Jan. 1.
Despite the negative comparison to a year ago, industry analysts said the car market appears quite robust.
“Sales are a good deal better than they look,” said David Healy, an auto analyst with Drexel Burnham Lambert in New York. “A year ago, people were in a rush to buy cars before the end of the year.”
Healy added that recently implemented sales incentives probably helped this year’s numbers to a degree, but not significantly, as the latest round of incentives is not as widespread as sales incentive programs that expired in early October.
Pace Has Picked Up
“Sales are very, very positive,” said John Hammond, an auto analyst with J. D. Power & Associates in Westlake Village, Calif. “The proper context in which to interpret the figures of the last 30 days (is against) the low sales figures in October and early November.
The seasonally adjusted annual rate of auto sales for October was a dismal 5.9 million. For the first and second 10-day periods of November, the rate was 5.9 million and 6 million, respectively.
But in the past 30 days, the pace has picked up. Late November and early December saw adjusted annual sales rates of 7.7 million, and in mid-December the rate was 7.6 million.
(The seasonally adjusted annual rate reflects the number of cars that would be sold if a period’s sales pace were to continue for a full year.)
In the latest period, General Motors reported a decline of 16%, while Ford’s sales fell 28.4% and Chrysler’s slumped 15.1%.
Volkswagen and Nissan both took a beating, falling 29.8% and 50% respectively.
Only Honda and Nissan reported sales gains. Honda’s sales were up 34% from a year ago, while Nissan’s sales increased a hefty 104.8%. Toyota began production of its domestically built Corolla models in fall of 1986.
AUTO SALES Percentage changes in auto sales for the second 10 days of December are based on daily rates rather than total sales volume. There were eight selling days in the current period and nine in the year-ago period.
Dec. 11-20 Dec. 11-20 % 10-Day 1987 1986 change GM 79,169 105,963 -16.0 Ford 39,812 62,558 -28.4 Chrysler 22,408 29,701 -15.1 Honda U.S. 8,703 7,302 +34.0 VW U.S.* 935 1,465 -29.8 Nissan U.S. 1,217 2,732 -50.0 Toyota U.S. 1,704 933 +104.8 Mazda U.S. 200 -- -- TOTAL 154,148 210,654 -17.7
*Estimate
