Car Sales Skid 18.5% in Early March
Sales of new domestic cars, apparently hurt by consumer worries about rising interest rates, plummeted 18.5% in early March, the auto industry reported Tuesday.
Domestic auto makers reported sales of 172,514 cars from March 1 to March 10, down from 211,772 in the same period last year.
“That’s a miserable sales number,” said Theodore Sullivan, an automotive analyst with Wharton Econometrics.
Sullivan blamed the “impact of higher interest rates on consumer buying attitudes.”
Interest rates have risen in recent months, partly because of efforts by the Federal Reserve to slow economic activity and thus curb inflation. The prime lending rate--the bank lending rate used as a benchmark for many types of consumer loans--is 11.5%, up from 8.5% a year earlier.
Some analysts, however, said sales are slow because the car-buying cycle has finally matured after the country’s four-year car-buying binge.
“It’s certainly sluggish demand,” said Christopher Cedergren, an auto analyst with J. D. Power & Associates. “Demand for new cars has peaked. We’ve had four good years of new car buying. Demand has slowed to a more reasonable level.”
Maryann N. Keller, an automotive analyst with Furman Selz Mager Dietz & Birney, sounded a similar note. “So many cars have been sold, its time for a rest,” she said. “This is a buyer’s market. Since the fourth quarter of 1986, the car market has been inching slowly toward a buyer’s market. . . . We’re really in it now.”
Among the Big Three auto makers, sales at Chrysler were off 35.9% to 22,236; at Ford, down 21.4% to 54,112, and at GM, off 13.4% to 82,575.
Although they accounted for a tiny portion of the overall sales volume, sales of domestically produced Toyotas and Mazdas posted big percentage gains because of increased productivity at their U.S.-based manufacturing plants.
From the beginning of the year to March 10, overall domestic auto sales are off 9.7% to 1,235,121.
March 1-10 % 10-Day 1989 change GM 82,575 -13.4 Ford 54,112 -21.4 Chrysler 22,236 -35.9 Honda U.S. 8,765 +3.2 Nissan U.S. 1,673 -13.4 Toyota U.S. 1,850 +66.7 Mazda U.S. 867 +54.8 Mitsubishi U.S. 436 -- TOTAL 172,514 -18.5
There were 9 selling days in the period this year and last year.