Iacocca Sees Slow Summer for Industry

Chrysler Corp. Chairman Lee A. Iacocca said Wednesday that it may be a “long, hot summer” ahead for U.S. auto makers and predicted that incentive programs will likely be extended in an effort to boost slumping auto sales.

Iacocca’s comment came at ground-breaking ceremonies for the auto maker’s new $1-billion Jefferson Avenue plant in Detroit, which will be finished in 1991. The plant replaces the existing Jefferson factory that has been in operation since 1925.

U.S. auto sales are down 6% so far this year from 1988 levels. The companies have instituted broad incentives to help spur sales, including Chrysler’s offer of 0% financing on short-term loans as well as rebate plans.

But sales have failed to push the industry’s annual selling rate above 6.8 million for the year, compared to the 7.6 million cars sold last year. Analysts have said it is almost certain that the programs will be continued through the third quarter, if only to maintain the current anemic selling pace.

When asked for his view on analysts’ predictions, Iacocca responded: “The market’s a little soft. I think you’ll see some kind of incentives.”

He added: “I think it’s going to be a long, hot summer.”

Slow sales of subcompact models prompted Chrysler last week to announce that it will not recall a second shift of workers at the Jefferson Avenue plant, which produces the Omni and Horizon models.