December’s Heavy Car Sales Cut Into January Buying

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Times Staff Writer

Led by a drastic decline in sales at General Motors, new domestic auto sales fell 3.1% in early January, the U.S. auto makers reported Friday. Analysts said the sales decline came in the wake of an overheated sales increase in late December.

“In the last 10 days of December, GM was really terrific, and in the first 10 days of January, GM was really awful,” said David Healy, an automotive analyst with Drexel Burnham Lambert.

Healy said that GM tried to cram as many sales as possible into the last 10 days of 1988. But apparently it cost GM sales in the next 10 days. Healy added that Ford had been using the same tactics to increase its year-end market share.


Other auto analysts agreed that the sales rate for the entire domestic auto market was excessively high in late December, making the sales slump in early January unsurprising. A sales rate more reflective of the current situation, some suggested, was somewhere between the 5.2 million annual sales rate in early January and the 10.3 million annual rate in late December.

“I would look at the last 10 days in December . . . 10 million is too high, and the current rate is too low,” said Maryann N. Keller, an auto analyst with the New York investment firm Furman Selz Mager Dietz & Birney. “The best (indication of sales trends would result from) averaging the two figures together.”

Among the Big Three auto makers, GM’s sales fell 19.8%, Ford’s sales rose 13.0% and Chrysler’s sales rose 11.4%.

The foreign-based auto manufacturers that build autos in the U.S. reported healthy sales. The large gains are due to increased capacity at their new U.S. plants, as well as the cheaper costs of producing their cars on U.S. soil, rather than overseas.


Jan. 1-10 % 10-Day 1989 change GM 47,608 -19.8 Ford 37,420 +13.0 Chrysler 15,573 +11.4 Honda U.S. 3,992 +71.1 Nissan U.S. 1,538 +75.2 Toyota U.S. 588 +134.3 Mazda U.S. 261 +214.5 TOTAL 106,980 -3.1

There were 7 selling days in the selling period this year and last year.