Car Sales, Key Indicators Point Down : Autos: Vehicle sales drop 2.4% in July from year-earlier levels. Analysts say economic concerns could hurt the upcoming introduction of ’93 models.
Sales of North American-made cars and trucks stayed virtually flat in late July, resulting in an overall decline of 2.4% for the month--a disappointment for the industry after several consecutive months of steady improvement.
Compared to the year-earlier period, domestic car sales fell 0.5% during the last 10 days of the month, while light truck sales managed a 1.6% increase, the auto industry said Tuesday. For the month, sales of imported and domestic vehicles fell to 1.14 million from 1.16 million in the year-ago period.
In part, July sales suffered in comparison to a year ago because many fleet sales to rental car companies that would have occurred in July were instead recorded in June this year. But analysts said the bottom line is that auto sales--one of the few economic bright spots in recent months--cannot be sustained without support from other sectors of the economy.
“If you’re still sitting there worrying about your job, you’re not going to go out and buy a car,” said George Magliano, who follows the auto industry for the WEFA Group, a Bala Cynwyd, Pa.-based research and forecasting firm.
Dealers say most of their customers are people who simply can’t drive their old vehicles any longer. That is not a good sign for the upcoming new-model introductions in September, a period when auto makers count on attracting customers who just want a new car, in addition to those who actually need one.
“Most of the people that come in need to get rid of a car,” said John Koelmel, sales manager at Prestige Ford in San Gabriel. “You used to never see a trade-in with over 100,000 miles on it. Now, I’m getting cars in with 130, 140, 150,000 miles on them. I got a T-bird in last week with 162,000 miles on it. That’s unheard of.”
On a seasonally adjusted basis, the pace of vehicle sales in July came to 12.6 million, down from a two-year high of 13.6 million in June. The seasonally adjusted annual rate is a reflection of the number of vehicles that would be sold if July’s sales pace were to continue for a full year.
Most analysts have predicted that the auto industry will sell between 13.2 million and 13.5 million vehicles in 1992, which means sales in the second half of the year would have to be considerably stronger than the seasonally adjusted rate of 12.9 million they averaged through the first half of the year. But WEFA’s Magliano says one month of backsliding does not mean the industry’s recovery has stalled:
“The recovery goes in fits and starts, and this was a fit. If it happens again in August, we’ll be worried about it.”
Ford sales Vice President Robert Rewey attributed the dip in July sales to an unusually high number of sales to rental car companies in June.
“It’s important to recognize that the industry (accelerated) deliveries for daily rental companies, at their request, into June/early-July to accommodate a late summer spike in reservations,” Rewey said. “Consequently, the ensuing ‘pay-back’ was not at all unexpected.”
Ford said car sales fell 5.5% during the late-July period compared to the same period last year, while trucks were up 2.5%. General Motors Corp. reported a 5.7% jump in truck sales and a 13.9% decline in car sales compared to the comparable period last year.
Chrysler Corp.’s car sales climbed 11.3% for the whole month of July, while truck sales rose 6.6%. Chrysler reports sales figures only monthly.
Among the Japanese auto makers, Honda posted the biggest gain in domestic car sales for late July, with a 42.5% increase over the year-ago period. Mazda sales were up 23.2%, while Nissan and Toyota posted respective car sales declines of 28.6 % and 15.9%.
The Big Three Detroit auto makers cornered 71.9% of the car and truck market in July, up 1.5 percentage points from July, 1991.
Auto Sales
Seasonally adjusted annual rates for all cars and trucks sold in the United States. Domestic figures include vehicles built in the U.S. by Japanese auto makers. The figures use seasonal patterns to predict the auto industry’s sales rate for a full year.
1991
July: 13.1
Aug: 12.6
Sep: 13.3
Oct: 12.0
Nov: 12.5
Dec: 13.2
1992
Jan: 11.8
Feb: 12.5
Mar: 12.5
Apr: 12.6
May: 12.9
June: 13.6
July: 12.6
Source: Commerce Department
