New domestic auto sales rose 13.2% in mid-October, the auto industry reported Tuesday. But auto analysts said the gain was misleading, since the comparable sales from a year ago were extremely weak.
In fact, they noted that the selling rate is significantly below the level posted by the industry throughout much of 1988 and suggested that the price increases on the new 1989 models have deterred some buyers.
“Of course the increase is because sales were so poor last October,” said Cynthia Certo, an automotive industry analyst with Integrated Automotive Resources in Wayne, Pa. She noted that sales were so weak last year because sales incentives had just expired at the end of the previous month.
“This year, General Motors and Chrysler extended their incentives and even put them on some 1989 models,” said Certo, enhancing the comparison with last year’s performance.
But, she noted, the latest sales figures are “not as strong as the numbers that we saw in the first half of 1988.”
Analysts said that mid-October’s annual sales rate was far above last year’s but well below the level posted by the industry throughout much of 1988.
“Sales are a little bit soft,” said David Healy, an automotive analyst with Drexel Burnham Lambert. “There is a negative reaction to some of the price increases in early October.”
Analyst Theodore Sullivan, of WEFA Group, a Bala-Cynwyd, Pa., economic forecasting firm, said the low annual sales rate indicated an underlying weakness in demand, especially since sales incentives were in place throughout the period.
Still, the year-to-year sales comparisons are likely to continue to look good for the next few 10-day selling periods. Last year’s stock market crash briefly depressed car sales in November and December, so this year’s numbers should look quite healthy by contrast.
Among the Big Three auto manufacturers, sales at General Motors rose 8.1%, sales at Ford rose 14.4% and sales at Chrysler jumped 30.7%.
However, despite the sales gain, GM’s share of the domestic market, excluding imports, fell to 47.4% from 49.7% last year.
Chrysler’s market share increased to 14.9% from 12.9% in 1987.
Ford’s domestic market share rose to 30.4% from 30% in 1987.
Among the Japanese cars that are built in the United States, Honda’s sales rose 31.7%, Toyota’s sales jumped 33.9% and Nissan’s sales fell 27.6%. Mazda, which only recently began manufacturing in the United States, reported selling 913 cars during mid-October.
Percentage changes in auto sales for the second 10 days of October 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.
October % 10-Day 1988 change GM 93,086 +8.1 Ford 59,613 +14.4 Chrysler 29,269 +30.7 Honda U.S. 9,729 +31.7 Nissan U.S. 2,040 -27.6 Toyota U.S. 1,546 +33.9 Mazda U.S. 913 -- TOTAL 196,196 +13.2