Gulf Crisis Hasn’t Yet Affected U.S. Car Sales : Transportation: Unfazed, Americans in September kept up the same buying pace as last year. But a deep recession won’t help the slumping industry.
American auto customers, shrugging off the Persian Gulf crisis, bought roughly the same number and types of new cars in September as they did a year earlier, the industry reported Wednesday.
But analysts and auto executives voiced wariness about the impact of a deep recession on an industry that has been on the downswing for two years and said the crisis has put off prospects for a recovery in vehicle sales.
Car sales in the United States in September slipped less than 1% from year-earlier levels and approximately matched the sales pace of the months leading up to Iraq’s Aug. 2 invasion of Kuwait and the subsequent run-up in gasoline prices.
On a seasonally adjusted annual rate basis, the September results equaled 7.1 million cars, slightly above the average rate for the first eight months of the year.
Industry observers said the performance was better than might have been expected, in light of the steep falloff in overall consumer confidence that closely followed the crisis and military buildup in the Middle East.
Wednesday’s reports from the nine manufacturers who build and sell cars in this country were the first to fully gauge car buyers’ reactions to the economic uncertainty and surging gasoline prices caused by the Iraqi invasion.
“We haven’t seen any kind of substantial deterioration,” said Chris Cedergren, analyst at J. D. Power & Associates, auto marketing consultants in Agoura Hills. “The most encouraging thing is we have not seen any kind of change in the mix” of cars sold.
However, September sales showed a continuation of a troubling trend for U.S.-based auto makers: General Motors, Ford Motor and Chrysler Corp. fell 5.3% from the same month of 1989, while so-called transplant cars--those built here by Japanese-based companies--enjoyed an increase of 46%.
The transplant cars have boosted their market share to 14% from 9% over that period. That has more than offset a decline in imported cars, sales of which fell 9.4% this September from last.
The September results also closed the books on the 1990 model year, which saw total sales of domestically built cars fall 7.8% to 6.8 million. Big Three sales tumbled 13%, while transplants surged 40% and imported cars fell 9.8%.
Sales in the final 10 days of the month followed the pattern of the full month, posting a fractional percentage increase over the like 1989 sales period. The percentage changes are based on sales per day, and this September had one selling day less than September, 1989.
When gasoline prices skyrocketed in 1973 and 1979, there was a dramatic switch away from large cars toward smaller, more fuel-efficient ones. And the 1979 oil shock triggered a steep worldwide recession that took a heavy toll on the U.S. auto industry.
This time, however, except for a falloff in sales of full-sized pickup trucks, there have been no major changes so far in either the volume or types of vehicles sold. Analysts said that the public is getting used to volatile fuel prices and that the fuel-economy gap between big and small cars is much narrower than it was, so there is less of a dollar pay-back for switching to a small car.
While the direct impact of the Persian Gulf confrontation on car sales so far has been minimal, “We are more concerned about the overall macro environment,” said economist Clifford Swenson of Economic Consulting & Planning Inc. in New York. “If the economy declines any more, it will translate into bad auto (sales).”
Ford Motor’s top U.S. sales executive, Robert L. Rewey, voiced similar concerns, noting the sharp fall in consumer confidence. He urged congressional approval of the proposed $500-billion, five-year deficit reduction compromise plan so that interest rates can be lowered and consumers encouraged to buy.
Commenting recently on the U.S. car market, Chairman Bennett E. Bidwell of Chrysler’s car and truck division said, “It’s not Armageddon, but it is Mudville.”
Trade publications report that U.S. auto firms have been modestly cutting back on their production plans for the rest of the year.
By company in September, General Motors sales fell 6.6% and Ford slipped 2.2% while Chrysler declined 7.1%.
Meanwhile, transplant cars recorded the following September increases: Honda 34%, Mazda 89%, Mitsubishi 3.6%, Toyota 38% and Nissan 85%. The sixth transplant car maker, Subaru, wasn’t building cars here last year so no comparison was possible.
For the second straight year, the Honda Accord, most of which are built in Ohio, was the best-selling single car model, easily outpacing the Ford Taurus.
