Car Manufacturers Report Worst Yearly Sales Since ’83 : Automobiles: The Big Three close out the year with a 3.2% sales drop in December. Industry officials don’t expect relief unless the economy improves and the Mideast crisis eases.
Would-be car buyers kept their feet mostly on the brakes in December, bringing to a dreary end the nation’s poorest year for automobile sales since 1983, industry officials said Friday.
A year that began with hopes for a recovery from an ongoing auto sales downturn ended with steep production cuts, widespread worker layoffs and empty dealer showrooms, all blamed on the recession and the threat of war.
A late-December spurt in car sales by the U.S.-based auto firms was offset by another steep decline in their sales of light trucks, leaving the Big Three down 3.2% for the month against a poor showing a year earlier.
Based on incomplete reports from foreign auto firms, Americans bought 14.2 million cars and light trucks in 1990, a drop of 4% from 1989. Auto executives have predicted a decline of another 5% this year.
The year-end sales figures showed weakness extending to one of the strongest foreign-brand auto makers, Honda, which reported a fall of 20% in December sales of its imported and Ohio-built cars combined.
Sales fell a like 20% in December at Honda of Hollywood, where general sales manager Hector Olivas said the prospect of war in the Middle East as early as Jan. 15 has people worried.
“I think that’s really going to affect things in the first quarter,” said Olivas. “It’s not a matter of dollars and cents. It’s just that people will be thinking about things like that instead of about buying cars.”
One positive development, Olivas noted, was this week’s lowering of the prime lending rate to 9.5% from 10% by major banks. Intended to reduce borrowing costs--one step toward restoring the consumer confidence that plummeted after Iraq invaded Kuwait on Aug. 2--the change “should help business,” Olivas said.
For December, though, General Motors Corp. reported virtually flat business, as higher car sales were offset by weak truck sales. That reflected a post-invasion trend blamed on higher gasoline prices, which apparently have prompted customers to switch to cars from trucks. For the year, GM vehicle sales fell 3.3% to 4.97 million units.
Ford Motor Co. reported a 2.7% decline in vehicle sales in December and a 7.8% drop for the year, to 3.6 million cars and light trucks. Chrysler Corp. car and truck sales tumbled 10.7% for the month and 15.5% for the year, to 2 million units.
Honda’s late-year tumble and a 17% surge at Chrysler in late December car sales forestalled for another year the prospect of Japan-based Honda displacing Chrysler as the third member of the U.S. “Big Three,” behind GM and Ford.
Looking at car sales only, the December results left Chrysler a scant 6,000 cars ahead of Honda for 1990, prompting skeptics to wonder if someone hadn’t cooked the books.
“From the perspective of Honda not wanting to incur a political firestorm or Chrysler not wanting to be replaced, it’s certainly not out of the realm of possibility,” said analyst Maryann Keller of Furman Selz Inc. in New York. “There are always interesting things going on in the last 10 days of the year.”
In sharp contrast to Honda’s slippage in December, Toyota--the top foreign-brand auto maker in the U.S. market--reported a 9.3% increase in December car and truck sales and a 12% increase for the year, to a record 1.02 million.
Nissan car and truck sales rose about 7% in December, but fell 9.7% for the year, to 597,900 imported and U.S.-built vehicles.
Analysts and auto executives agreed there will have to be a resolution of the Middle East crisis before people start buying cars and trucks again. Even then, they see no real recovery until late in 1991.
“Based on present economic forecasts, we expect industry sales weakness to continue in early 1991, with improvement as the year progresses,” said Robert L. Rewey, sales vice president at Ford.
Some highlights of automobile sales in 1990:
* Thanks to their fast-growing production in U.S. factories, Japanese-owned companies improved their U.S. market share of car sales to 28% from 25%.
Most of those sales came at the expense of Detroit, whose share fell to 65.8%. And the Japanese gains came in the face of declining sales of their imports, which were displaced by sales of cars built in the eight foreign-owned assembly plants in the United States.
* Luxury car sales surged in December as customers rushed to beat a Jan. 1 tax of 10% on the amount of a car’s price that exceeds $30,000.
Jaguar, for example, reported a 17% jump in December sales against a full-year decline of 1.3%. Porsche reported similar results, while Nissan’s Infiniti and Toyota’s Lexus nameplates reported their best monthly sales ever.
* The top-selling automobile, in total units sold, was the Honda Accord, followed by Ford Taurus, Chevrolet Cavalier, Ford Escort and Toyota Camry.
The top-selling truck-class vehicle was the Ford F-Series, followed by the Chevrolet CK-Series, the Ford Ranger, Chevrolet S-10 and Dodge Caravan.
BAD YEAR FOR DETROIT How the major auto companies fared in 1990 sales of U.S.-built autos. The figures do not include imports.
1989 1990 sales sales % Company (1,000s) (1,000s) change Autos GM 3,277 3,141 -4.5 Ford 2,100 1,880 -10.7 Chrysler 918 795 -13.6 Honda 389 464 +18.8 Toyota 212 349 +63.6 Nissan 103 110 +5.9 Mazda 42 73 +74.2 Subaru 0 16 -- Trucks GM 1,662 1,625 -2.6 Ford 1,402 1,373 -2.4 Chrysler 946 824 -13.1 Toyota 222 182 -18.1 Nissan 131 132 -0.5
The percentage changes are calculated on a daily sales rate basis, reflecting the fact there were 307 selling days in 1990, up from 306 in 1989.
