Domestic Auto Makers Report Sales Off 10.5%

Sales of new U.S.-built cars slipped 10.5% in early December, the eight major domestic auto manufacturers reported Wednesday. Auto analysts blamed 1989 car prices, as well as rising interest rates.

The U.S. operations of the Japanese auto makers, however, generally did well, due to expanding production at their new American manufacturing facilities. Japanese-designed cars built in such “transplant” plants are counted as domestic cars rather than imports.

Sales of U.S.-built cars fell to 167,438 units during early December, down from 187,126 in early December, 1987. Sales by General Motors fell 12.9%, Ford dropped 11.6% and Chrysler was off by 8.6%.

“My guess is that (sales fell because of) the new higher prices on the 1989 models,” said David Healy, an auto analyst with Drexel Burnham Lambert. An additional factor, he added, could be that auto financing companies have been suffering some losses, and are now less willing to approve financing for marginal consumers. “The auto financing companies are paring back on the eligibility of some of their marginal car buyers. They suffered higher-than-expected losses on some of their loans,” Healy said.

Others argued that the decline was part of a longer-range slowdown. The slow sales rate is “a continuation of a trend that began two months ago,” said Theodore Sullivan, an automotive analyst with WEFA Group. “Consumers are reacting against high interest rates . . . (which) raise the purchase price (of a new car), and play with the consumers psyches.”

If the early December slump continues, analysts warn that the domestic firms may have to pare back their production plans to reduce their inventories of unsold cars.

AUTO SALES

Dec. 1-10 % 10-Day 1988 change GM 80,152 -12.9 Ford 50,237 -11.6 Chrysler 24,056 -8.6 Honda U.S. 9,358 +33.7 Nissan U.S. 1,966 +28.5 Toyota U.S. 1,086 -41.7 Mazda U.S. 583 +237.0 TOTAL 167,438 -10.5

There were 9 selling day in the selling period this year and last year.