U.S. Auto Sales Jump 17.1% in Early January : Analysts Note Year-Ago Period Was Very Poor
Sales of new cars in early January were up substantially from the anemic year-ago level, the companies reported Wednesday, but industry analysts nonetheless called the latest figures disappointing.
In January last year, auto sales fell off sharply in a “payback” of the rush to buy cars before Dec. 31, 1986, when the tax deduction for sales tax on such purchases was ended. In the Jan. 1-10 period this year, sales were up 17.1% but still amounted to a mediocre seasonally adjusted annual rate of 5.9 million. The annual rate is a reflection of the number of cars that would be sold if the early January pace continued for 12 months.
Analysts said the relatively poor sales in early January were likely the result of a heavy snowstorm and cold spell which blanketed much of the country.
“This year, the reason we’re probably not doing particularly well . . . isn’t because of any inherent weakness in the market; it’s the result of very bad weather,” said Thomas O’Grady, an auto analyst with Integrated Automotive Resources.
Other auto analysts agreed that sales were weaker then expected, but they were unsure how much the bad weather was to blame.
“The cold weather probably impacted sales . . . it’s hard to gauge how much,” said Christopher Cedergren, an auto analyst with J. D. Power & Associates. “We were expecting sales to come in at (an annual rate of) 7 million units. I’m waiting to see what happens during the next 10-day period.”
Added David Healy, an analyst with Drexel Burnham Lambert: “It looks like it snowed selectively on GM dealers.” General Motors lost nearly seven percentage points of market share in the latest period, falling to 53.8% of all cars sold from 60.6% a year ago.
Total domestic auto sales for early January totaled 110,353 units, compared to 107,735 in 1987. There were seven sales days in the period this year and eight sales days in the period last year. Percentage changes are calculated from the daily sales rates.
GM’s sales were up 3.9% in the period while Ford’s rose a hefty 55.5% and Chrysler’s increased 14.2%. To lure buyers, GM’s Buick, Pontiac, Chevrolet and Oldsmobile divisions recently announced new rebate programs.
Among the foreign companies that produce cars in the United States, only Honda showed a sales increase, up 26% from a year ago. Volkswagen, Nissan and Toyota suffered sales drops of 19.4%, 7.7% and 30.2% respectively.
AUTO SALES Percentage changes in auto sales for the first 10 days of January are based on daily rates rather than total sales volume. There were seven selling days in the current period and eight in the year-ago period.
Jan. 1-10 Jan. 1-10 % 10-Day 1987 1986 change GM 59,368 65,309 +3.9 Ford 33,115 24,335 +55.5 Chrysler 13,985 13,995 +14.2 Honda U.S. 2,333 2,116 +26.0 VW U.S.* 340 482 -19.4 Nissan U.S. 878 1,087 -7.7 Toyota U.S. 251 411 -30.2 Mazda U.S. 83 -- -- TOTAL 110,353 107,735 +17.1
*Estimate
