The domestic auto industry kicked off the 1989 model year with a bang in early October, but industry observers warned that the huge sales gains are only temporary.
Sales of U.S.-built cars were up 36.8% in the first 10 days of the month, compared to the same period a year ago. October is the first month of the industry’s 1989 model year.
Combined sales of cars and light trucks, which consumers are increasingly substituting for passenger cars, rose 31.5% during the period, the seven auto makers with U.S. operations said Thursday.
Weak Sales in 1987
Ford posted the biggest gain, with a jump of 70% in passenger car sales during the 10 days. But even General Motors, which has lost its market share over the past two years, said its sales rose 31.7% over the same period last year. Chrysler’s sales, meanwhile, rose 11.8%.
There were eight selling days during the current period, compared to nine last year; thus the percentage changes are based on the average daily sales.
The spectacular percentage increases came not because of a sudden surge in auto sales earlier this month, analysts said, but because the numbers were being compared against extremely weak sales during early October, 1987.
At that time, the auto makers dropped their big sales incentive programs featuring rebates and deep discounts on new car loans.
Many of those sales incentives, used to clear out dealer inventories of unsold 1987 model cars, expired at the end of September, 1987, at the onset of the 1988 model year. Many buyers who had been planning to buy cars in the fall had bought earlier instead to take advantage of the incentives. Sales thus plunged when the incentives were removed in October.
This year, however, much of the industry has extended the traditional, clearance-time sales incentives into the new model year, and so sales have remained relatively stable.
AUTO SALES Percentage changes in auto sales for the first 10 days of Octoberare 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.
October % 10-Day 1988 change GM 90,183 +31.7 Ford 58,407 +70.0 Chrysler 24,566 +11.8 Honda U.S. 8,630 +43.1 Nissan U.S. 1,005 -47.5 Toyota U.S. 475 -40.2 Mazda U.S. 386 -- TOTAL 183,652 +36.8