April Auto Sales Suggest Market Has Slowed Down
Despite widespread incentives introduced by the auto industry at the end of March, U.S. sales rose just 4.9% in April, suggesting a fundamental slowdown, analysts said.
Total auto sales--including domestics and imports--were 909,776 units in the month, compared with 902,321 units in April of last year.
“The incentives helped, but not as much as they did last year,” when similar programs were in effect, said Maryann N. Keller, an automotive analyst with Ferman Selz Mager Dietz & Birney. “The market has slowed down. Everybody has been expecting the pause for three years, and it’s finally come. People have spent a lot of money on cars and trucks in the last five or six years. They’re very reluctant to buy now.”
“Sales certainly weren’t as strong as the auto manufacturers hoped they would be,” agreed Christopher Cedergren, an automotive analyst with J. D. Power & Associates. “The incentives aren’t having the pull that the manufacturers expected.”
Since incentives are having little effect, analysts predicted that sales would drop further in May and June, regardless of whether or not the programs are extended. They also suggested that production cuts may be necessary in the third quarter of 1989 in order to keep down Detroit’s inventories of unsold cars.
The domestic auto industry--which includes foreign companies that manufacture cars in the U.S.--reported that domestic sales for the period rose to 667,444, up 6.5% from 651,560 last year.
Among Detroit’s Big Three auto makers, General Motors’ sales rose 1.2%, Ford’s sales jumped 12.9% and Chrysler’s sales fell 2.9%.
But much of the percentage increase in domestic sales was due to increased production among the foreign companies at their new U.S. assembly plants, many of which are just gearing up for full operations. For example, Toyota’s sales increased 311.8% and Mazda’s sales jumped 85.1%. Mitsubishi reported sales of 1,939 U.S.-made autos, but there were no comparable year-ago figures for the firm because it just started production last fall.
Import sales rose a slight 0.5% in April, with Honda’s import sales showing the greatest increase--31.7%. European sales, including luxury makers like Audi, BMW, Mercedes, Volvo, Porsche and Saab, fell 4.4% in the period.
AUTO SALES
Percentage changes in auto sales for the month of April are based on daily rates rather than total sales volume. There were 25 selling days in the current period and 26 in the year-ago period.
% April 1988 change GM 6,103 +1 Ford 202,134 +12.9 Chrysler 88,821 -2.9 Honda US 40,844 +25.5 Nissan US 7,226 -29.4 Mitsubishi US* 1,939 -- Toyota US 16,292 +311.8 Mazda US 4,085 +85.1 Domestic 667,444 +6.5 Toyota Imp. 40,501 -3.4 Nissan Imp. 34,298 +14.3 Honda Imp. 38,377 +31.7 Mazda 17,373 +7.4 Subaru 12,529 +13.0 VW 11,388 -28.4 Volvo 8,677 +13.9 Hyundai 16,808 -30.5 Mitsubishi 5,728 -1.6 Others* 56,653 -4.4 Imports* 242,332 +0.5 Total US 909,776 +4.9
