Auto and Truck Sales Plummet 17.9% in April : Vehicles: Lower dealer inventories were a bright spot, but hopes for a recovery soon remained dim.
April sales of cars and trucks tumbled 17.9% from a year ago, auto makers reported Friday, crushing hopes that a slight quickening of the sales pace in March was the beginning of a steady recovery.
Imported and domestically built vehicles sold at a seasonally adjusted annual rate of 11.2 million, down from March’s more encouraging 12.4 million. Battered by war, recession and drooping consumer confidence, auto sales have been depressed for almost a year. In April, 1990, vehicles sold at an annual rate of 13.8 million.
“The market fundamentals really have not improved significantly through April--they’ve deteriorated,” said Susan Jacobs, an analyst with Jacobs Automotive in Little Falls, N.J. “The weakness in the economy is what is holding the sales rate down.”
Analysts and industry executives say one bright spot in the perpetually gloomy auto industry numbers is that dealer stocks of cars and trucks are relatively low. Although inventories are thought to have increased slightly over April, the most recent figures show that, on average, dealers at the end had a manageable 73-day supply of cars and trucks on their lots.
“Inventories are in good shape because dealers sold down their stocks to avoid high interest rates and the overall uncertainties of the economy,” Chrysler Corp. Chairman Lee A. Iacocca said last week, highlighting the good points in an otherwise dismal first-quarter earnings report.
Brad Cooper, a sales manager at Nissan of Long Beach, said he has kept a close eye on the dealership’s inventory and altered its vehicle orders accordingly.
“Sometimes they try to entice you to take more cars--they tell you they’ll give you free flooring or pay for part of it,” Cooper said. “But we’re not in business to help Nissan. We’re in business to help ourselves.”
Jacobs said lean inventories will allow auto makers to concentrate on long-term strategies to pull themselves out of their slump instead of on the immediate need to sell cars.
“The companies that are not swimming under inventory will be better poised to take advantage of the next expansion,” Jacobs said. “Instead of putting out the fire of the excessive inventory, they can put their resources into planning for the long term.” General Motors Corp., Ford Motor Co. and Chrysler posted a combined year-to-year sales decline of 19.7% for April, compared to a 7.8% drop in vehicles sold by Japanese “transplant” companies. GM said sales of cars and trucks fell 19.8% for the month. Ford attributed part of its 23.8% decline to delivery of a lower than usual number of cars to fleet customers.
Auto Sales
Seasonally adjusted annual rates for U.S. cars and trucks. Domestic figures include vehicles built in the United States by Japanese auto makers. The figures use seasonal patterns to predict the auto industry’s sales rate for a full year.
In millions of cars
* Domestic
FEB 1990: 13.8
MAR:13.9
APR: 13.8
MAY: 13.7
JUN: 14.3
JUL: 14.2
AUG: 13.7
SEP: 14.4
OCT: 13.5
NOV: 12.7
DEC: 12.7
JAN 1991: 11.1
FEB: 11.8
MAR: 12.4
APR: 11.2
Source: U.S. Department of Commerce
* Import figures not listed.
* Since January, European luxury car sales have been reeling from the double whammy of the luxury tax and a stricter gas-guzzler tax. This month, Porsche’s sales were down 56.5% from last April, and Jaguar’s sales were down 51.6%.
* Chrysler Corp.’s car sales were down 16.7% in April, but the auto maker was the only one of the Big Three to post an increase in truck sales for the month, up 2% from April, 1990.
* Cars and trucks produced in the United States by Japanese auto makers fared better than those made by the Big Three: In the last 10 days of April, sales of Japanese “transplants” were up 4.7% over the same period last year, while Big Three vehicles slid 21.3%.
