Auto Sales Indicate Growing Recovery
Richard Wonser was tired of waiting.
With his 1982 Cadillac increasingly needing service, Wonser, 62, had thought about buying a new car for more than a year. But he kept postponing his purchase as he watched the economy nose-dive.
“It came down to the situation where I had put it off and put it off, and I could either keep waiting for the economy to improve or I could go out and buy the car I wanted,” the Glendale man said.
Last Friday, Wonser took the plunge. He went to Colonial Honda in Glendale and bought a new Honda Accord.
“I knew now was probably a good time to wheel and deal,” he said. “I just decided to finally go ahead and do it.”
The latest sales figures indicate that consumers such as Wonser have been trickling back into dealerships, helping fuel a grudging recovery in the long-moribund auto industry. For the second-consecutive month, auto sales improved in June, with the annual selling rate climbing to 12.9 million cars and trucks from May’s rate of 12.5 million.
Edward Sullivan, an economist with the WEFA Group in Bala-Cynwyd, Pa., said sales to fleets are minimal this time of year, so consumer purchases are almost wholly responsible for boosting the sales rate.
“You’ve seen the seasonally adjusted annual rate increase about 5,000-7,000 units over the last few months,” Sullivan said. “But what you don’t see is that early in the year, fleet buying contributed to a large percentage of the sales. Now you don’t have that, so the strength you’re seeing is really the consumer pulling it up.”
On Wednesday, auto makers selling cars and trucks in the United States posted a combined year-to-year decline in sales of 6.2% for June. Analysts discounted the significance of the percentage drop, though, because June was one of last year’s strongest sales periods.
Chrysler Corp. reported a 2.2% dip in sales versus last year, while General Motors Corp. said sales slipped 4.5%, and Ford Motor Co. posted a 12.7% decline. Yet each of the Big Three offered an outlook that was downright cheery for an industry that has been steeped in gloom for almost a year.
“Higher consumer confidence and improved economic activity in the month of June brought with it encouraging signs that we are coming out of the recession, and the sales outlook for the rest of the year is promising,” said J. B. Fitzpatrick, GM’s vice president for marketing.
Sullivan said the Big Three’s optimism was reflected in the companies’ decisions last week to beef up third- and fourth-quarter production schedules.
“They’re not going to do that unless they think sales are going to continue to gain some strength,” Sullivan said.
Japanese auto makers reported a slight 0.8% drop in sales versus June, 1990. Honda, Mazda and Mitsubishi posted respective declines of 2.6%, 12.5% and 19.2%. Toyota sales climbed 8.5%, Nissan was up 1.7%, Subaru sales jumped 8.6% and Isuzu sales rose 10% for the month.
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.
* Chrysler Corp.’s Jeep and minivan sales boosted the No. 3 auto maker’s truck sales to 5% over June, 1990, the highest increase for any month this year.
* General Motors Corp. said active duty U.S. military personnel bought 12,529 Chevrolet or Geo cars and trucks during the first 90 days of the auto maker’s military discount program. Chevy sales for June were down 1.2%.
* Sales of European luxury cars continued their sharp decline in June. Porsche posted a 51% decline, Audi sales plunged 48% and Saab slipped 45%. Jaguar said sales fell 42%, despite its offer to fully reimburse customers for the luxury tax on cars over $30,000.
