Auto Sales Dip; Of Big 3, Only Chrysler Gains

Sales of U.S.-built new cars dropped 2.1% in early July, the auto industry reported Wednesday.

Only Chrysler among the Big Three auto companies posted a gain for the first 10 days of July. It apparently benefited from changes in sales incentive programs.

All the major domestic auto makers have announced extensions of rebates and other incentives--although at lower levels--but the timing of their announcements earlier this week and the week before may have affected purchase decisions, analysts said.

“I think the timing of the incentives is moving the sales around,” said David Healy, an auto analyst with Drexel Burnham Lambert in New York. “Chrysler did well in (early) July. They were the last ones to announce the extension of sales incentives.”

By waiting to announce the extension of its incentives until after Ford and General Motors did, Chrysler may have forced more customers, who thought the firm’s incentives were about to expire, to hurry their decisions.

Ford, GM Sales Fall

There were 142,110 domestically built cars sold in the July 1-10 period, down from 165,970 units in the previous early July period.

Sales at both Ford and GM fell by 5.8%. Chrysler’s sales, however, rose 12.2%, giving it a 15.3% share of the domestic market, up from 13.3% of the market in the comparable period last year.

Still, some analysts dismissed the early July numbers.

“You can’t read a heck of a lot into (the auto sales),” said Theodore Sullivan, an automotive analyst with WEFA Group, a Bala-Cynwyd, Pa., economic forecasting firm. “You have the holidays; you have the hot weather, and also the incentives aren’t as lucrative as they were earlier. All these things together might have contributed to the small decline. (But these numbers) are not an indication of any kind of trend.”

Auto industry observers say rebates and incentives cut considerably into profits, and the Big Three auto makers are taking advantage of the current sales strength to try to scale back their rebates. One of the most recent examples of rebate-trimming includes Chrysler’s latest announcement that rebates on its Aries-Reliant models will drop from $500 to just $400.

Honda and Toyota’s U.S. car manufacturing continued to show strength in early July. Honda’s U.S-built car sales rose 18.1%, and Toyota’s domestic auto sales rose 42.5%.

Nissan faltered slightly, with a sales slump of 2.7%, and Mazda sold 281 autos. Mazda did not produce automobiles domestically in the same period last year.

Volkswagen announced that it will no longer give out its domestic sales in the 10-day period but will instead announce them at the end of the month. The West German company is closing its only U.S. assembly plant at New Stanton, Pa.

AUTO SALES

July 1-10 % 10-Day 1988 change GM 66,737 -5.8 Ford 41,436 -5.8 Chrysler 21,700 +12.2 Honda U.S. 9,715 +18.1 Nissan U.S. 1,412 -2.7 Toyota U.S. 829 +42.5 Mazda U.S. 281 -- TOTAL 142,110 -2.1

There were seven selling days in the period this year and eight last year.