Auto Market Robust; March Sales Up 4.2%
Perhaps buoyed by optimism that the economy will remain healthy in this election year, consumers continued to buy cars at a strong pace in March, with total U.S. car sales up 4.2% from the year before.
“The entire auto market is really robust. It has been for the whole first quarter,” said Cynthia Certo, an auto analyst with Integrated Automotive Resources, a Philadelphia consulting firm. “It’s an election year. In general, people are more confident about economic stability in an election year.”
Certo added that this confidence often translates into an increased willingness to make major purchases.
The increase in March supports a trend of stronger-than-expected auto sales for much of 1988 so far. Auto analysts had not anticipated such strength this year, especially in the aftermath of the stock market crash last October.
Another reason for stronger auto sales may be the decline in the unemployment rate in March to 5.5%, the lowest it has been in nearly 10 years, analysts said.
Incentive Programs
“Auto sales seem to be running a little bit higher than the expectations that were formed after the stock market crash,” said John Hammond, an automotive analyst with J. D. Power & Associates. “It’s because the economy is stronger than expected. At this time of the year, in an election year, the government usually pumps the economy up. This year the economy is pumping itself up.”
Auto analysts agreed that both domestic and imported vehicles did well, if not exceptionally well, in March. Domestic vehicle sales were strengthened by a wide array of incentive programs. And imported vehicle sales were strong compared to last year, despite recent price increases due to the dollar’s decline against the Japanese yen.
“The domestics, you’d expect to do well, because of all the incentives,” Certo said. “(But) imports aren’t suffering as much as you’d think.”
Chrysler continued to increase its market share with an aggressive spring incentive program. Chrysler reported a 10% sales increase over year-ago levels, the highest among the “Big Three” auto companies.
“We’ve carved out a major increase in market share at the expense of the imports,” said Tom Pappert, Chrysler Motor’s group vice president of U.S. automotive sales. “Aggressive new model pricing, competitive incentive programs and our new products have added up to real impact in the market place.”
Chrysler estimated that it captured a 15.5% share of the domestic car market in March, up from its 14.4% share in March, 1987.
And, while General Motors reported a slight, 1.4% decline for the month, it ended March with a strong showing in the final 10-day selling period, leading analysts to believe that its incentive programs have begun to pay dividends. Ford, meanwhile, showed a 5.7% increase for March.
AUTO SALES Percentage changes in auto sales for the month of March are based on daily rates rather than total sales volume.
March Pct. 1988 change GM 347,273 -1.4 Ford 216,635 +5.7 Chrysler 113,593 +10.0 Honda US 36,191 +22.4 Nissan US 7,784 -26.0 VW US 3,811 -15.1 Toyota US 5,162 +43.9 Mazda US* 2,814 -- Domestic 733,263 +3.5 Toyota Imp. 42,734 +10.9 Nissan Imp. 39,536 -9.0 Honda Imp. 29,037 -7.7 Mazda 22,430 +12.6 Subaru 13,951 -3.1 VW Imp. 13,000 +25.7 Volvo 8,249 -24.1 Hyundai 26,166 +29.2 Mitsubishi 5,790 -13.3 Others** 69,107 +17.3 Imports 270,000 +6.0 Total U.S. 1,003,263 +4.2
* Mazda began U.S. production Sept. 1, 1987.
* * Estimate
