March Car Sales Fall 12% as Interest Rates Take Toll

Sales of new imported and domestic cars fell 12% in March from a year ago, the auto industry reported Tuesday, as consumers seemed frightened away from showrooms by rising interest rates.

Weak sales in February and earlier in March had already prompted the Big Three to offer low interest rates on new car loans as well as other sales incentives.

Auto analysts are divided over whether the newest incentive programs will be effective. They say that the next 10 to 20 days will test whether the incentives can work.

“We know sales have been lousy all this year,” said Christopher Cedergren, an automotive analyst with J. D. Power & Associates. “If there isn’t a marked improvement in April, there will be much greater concern. Manufacturers are going to have to sweeten the deal.”

“If we don’t see a pickup in 20-30 days, the industry has a serious problem,” agreed Thomas F. O’Grady, an automotive analyst with Integrated Automotive Resources, a market research firm. “We’re going to have to see some sharp cutbacks in production.”

The total auto industry sold 882,631 units in March, compared to 1,002,638 in the same period last year.

Both import and domestic sales were disappointing this month. Domestically produced automobiles fell 12.8%, while imports fell 9.6%.

AUTO SALES

% March 1989 change GM 347,273 -14.6 Ford 192,365 -11.2 Chrysler 83,504 -26.5 Honda US 33,810 -6.6 Nissan US 10,374 +33.3 Mitsubishi US 1,831 +-- Toyota US 16,078 +211.5 Mazda US 5,142 +82.7 Domestic 639,631 -12.8 Toyota Imp. 39,041 -8.6 Nissan Imp. 38,906 -1.6 Honda Imp. 28,601 -1.5 Mazda 18,711 -16.6 Subaru 14,321 +2.6 VW Imp. 10,760 +5.7 Volvo 8,718 +5.7 Hyundai 20,461 -21.8 Mitsubishi 8,026 +38.6 Others* 55,455 -18.4 Imports* 243,000 -9.6 Total US 882,631 +12.0