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Auto Makers Still Appear to Be Spinning Wheels; Sales Off 0.3%

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Times Staff Writer

Domestic new car sales dropped at an adjusted rate of 0.3% in mid-February, auto manufacturers reported Thursday.

While some industry analysts said it appears that the market is finally stabilizing after a sluggish start in 1989, others said they saw signs that demand for new cars is weakening.

The nine auto makers that assemble cars in the United States sold 186,328 cars in mid-February, compared to 210,316 cars in the same period last year. This year’s reporting period included eight days of sales, while last year’s period included nine sales days.

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Some analysts said that sales should have been better this year, given the widespread use of incentive programs such as cash rebates and discounted financing.

“It’s not a real strong performance. In fact, it is cause for concern,” said Christopher Cedergren, an automotive analyst with J.D. Power & Associates. “The manufacturers have been intensifying their incentive programs during the past couple of weeks. It would appear that that is not having that much affect.”

Cedergren said that manufacturers may be forced to step up incentive programs and cut production.

“The market has slowed to a point where nothing will pick up the tempo,” he said. “Demand is extremely soft. . . . Consumers have been on a buying binge for new cars for a couple years. (Manufacturers) may need to retrench for a period of slower sales.”

Other analysts said that existing incentives are not helping sales much.

“Sales incentives (are no longer) something unique,” said Maryann N. Keller, an analyst with Furman Selz Mager Dietz & Birney. “Manufacturers have got to have them, but people no longer get excited by a $600 rebate.”

In contrast to Detroit’s auto makers, several Japanese transplants reported sharply higher sales for the period. The increases reflect expanded production capacity at their U.S. manufacturing plants. The sales comparisons do not include autos manufactured overseas.

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AUTO SALES Percentage changes in auto sales for the second 10 days of February are based on daily rates rather than total sales volume. There were eight selling days in the current period and nine in the year-ago period.

February % 10-Day 1989 change GM 93,715 -1.2 Ford 54,662 +1.6 Chrysler 23,680 -18.5 Honda U.S. 7,880 +49.6 Nissan U.S. 2,339 +64.6 Toyota U.S. 2,145 +104.8 MazdaU.S. 1,474 +191.4 Mitsubishi U.S.* 443 --- TOTAL 186,328 -0.3

*Estimate

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