U.S. Auto Sales Robust in Early February, Up 0.3%

Total new domestic auto sales rose 0.3% in early February, compared to the same period a year ago, the eight domestic auto manufacturers reported Monday.

But on a seasonally adjusted basis, cars were selling at an annual rate of 8.4 million vehicles, indicating that dealers were doing a somewhat brisk business in early February.

Analysts agreed that the sales rate for the period was strong, although they differed as to whether they thought the robust sales would continue.

“I would say sales have been excellent,” said Thomas O’Grady, an auto analyst with Integrated Automotive Resources. “I think we will probably be raising our estimates in the very near term.”

“So far in 1988, the new car market is very strong,” said Christopher Cedergren, an automotive analyst with J. D. Power & Associates. “While this rate is strong, I don’t think it will continue. I think it will subside. Given all the economic indicators we are moving into a slowdown . . . it will affect sales.”

Cedergren said that the gross national product is beginning to diminish, which might indicate higher unemployment to come and eventually reduced auto sales. However, he said that the slightly diminished GNP pointed to a slowdown, rather than a recession, in the economy.

Ford, Chrysler, Volkswagen and Toyota all reported increased sales over the early February period of 1987.

General Motors, Honda and Nissan, however, lost some domestic sales from the year-ago comparison period.

Among the Big Three domestic auto companies, Ford’s sales increased 5.9%; Chryslers sales rose 12.8%, and GM’s sales dipped 4.2% from the year-ago period.

“GM had a pretty big incentive program last year compared to this year,” said O’Grady. “Their incentive programs are a little older. They are planning a big rollout for the Oldsmobile Cutlass Supreme (so) Oldsmobile wasn’t pushing. . . . Chrysler’s incentives are very aggressive. They are looking after (increasing their) market share, and I think they did it.”

Chrysler’s market share for the sales period was 14.9%. Chrysler’s total domestic market share for 1987 was 13.6%.

Volkswagen’s sales rose 17.5% in the 10-day period, while Toyota’s domestic sales rose 81.8%. Nissan and Honda both reported sales slumps from the year-ago comparison period. They lost 45.5% and 15.0% in sales, respectively.

“Nissan has had sales difficulties across the board in the past year,” Cedergren said. “Nissan has been hard hit by the tremendous price increases (caused by the devaluation of the dollar versus the yen.) Although these cars are produced in the U.S., many of their components come from Japan.”

Honda’s 10-day sales performance was hampered by short supply, he said. It has only a 10- to 11-day supply of cars, he noted, when a 60-day inventory is considered normal in the automotive industry. “I feel that Honda’s 10-day performance is a fluke, not an indication of slowing down car sales. (They’ll) snap back up and pick up their lost volume.”

AUTO SALES Percentage changes in auto sales for the first 10 days of February are based on daily rates rather than total sales volume. There were nine selling days in the current period and eight in the year-ago period.

Feb. 1-10 Feb. 1-10 % 10-Day 1988 1987 change GM 97,701 90,652 - 4.2 Ford 55,284 46,395 + 5.9 Chrysler 28,665 22,665 +12.8 Honda U.S. 7,208 7,539 -15.0 VW U.S.* 944 714 +17.5 Nissan U.S. 1,169 1,908 -45.5 Toyota U.S. 679 332 +81.8 MazdaU.S. 351 -- -- TOTAL 192,001 170,134 +0.3

*Estimate