Car Makers Report Robust Demand for Most Vehicles
Auto makers reported unusually strong demand for cars and light trucks in October, another sign that American consumers are less worried about the stock market and economy than some on Wall Street had feared.
Chrysler Corp., Toyota Motor Corp., Honda Motor Co., Volkswagen and Audi posted their best October ever for U.S. sales, breaking records that dated as far back as 1985.
“Strong industry sales continue to be driven by competitive pricing and tempting lending rates,” said Yale Gieszl, a Toyota vice president. “Consumers seem to be looking beyond the recent market turmoil with optimism.”
Chrysler’s sales rose 20% from October 1997; sport-utility vehicles, pickups and full-size cars contributed most of the gain. Toyota’s U.S. sales increased 27% and Honda’s improved nearly 10%.
Struggling Nissan Motor Corp. was the major exception; its sales fell 7% despite $2,000 rebates on its leftover ‘98s and a 19% improvement by its Infiniti luxury brand.
General Motors Corp. and Ford Motor Co. plan to report their October sales figures Wednesday.
Jamie Jameson, Chrysler’s director of sales and marketing, said his company expects demand to remain strong in the foreseeable future.
“Someone’s going to have to tell me when the fundamentals of the market are going to sag before I can tell them when we’re going to have a sales slowdown,” Jameson said. “There’s probably one coming, but I can’t tell you when that will be.”
German auto makers again posted some of the biggest percentage gains: Audi had a 137% improvement over October 1997, for its best sales month of the year so far and its best October since 1986. Volkswagen’s U.S. sales were up almost 69%, its best October since 1985.
VW and Audi have benefited from a revamped model lineup. Volkswagen is seeing the popularity of its new Beetle rub off on its other models, and Audi’s A4, A6 and all-aluminum A8 sedans are proving to be hits with luxury car buyers.
Chrysler’s sales of 226,179 vehicles broke the previous October record of 205,393, set in 1996. The October sales report was probably the last for Chrysler as an independent U.S. company. Its merger with Daimler-Benz is expected to be completed during the week of Nov. 16.
“With Day One of Daimler-Chrysler rapidly approaching, this is yet another sign that both companies are entering the merger with great momentum,” said James Holden, vice president of sales and marketing.
Chrysler’s four models off its redesigned LH platform--the Chrysler Concorde, LHS, 300M and Dodge Intrepid--boosted the company’s car sales total by 27% over the year-ago level.
Its year-to-year comparison was not as strong as the numbers suggest, because Chrysler was in the middle of the changeover to the new LH models a year ago, which slowed production, said analyst David Healy of Burnham Securities Inc.
“The car increase is obviously unsustainable,” Healy said.
But Chrysler said its gains came without a boost in less-profitable sales to rental, business and government fleets.
Truck sales rose 17% at Chrysler, led by strong demand for the new Dodge Durango SUV and the Dodge Ram and Dakota pickups as well as the Jeep Cherokee and Wrangler. Jeep Grand Cherokee sales were down due to the changeover to the ’99 model; the ‘99s were just beginning to reach showrooms in volume last month.
Rebates played only a partial role in Chrysler’s October gains. The Ram pickup was offered with a $1,000 discount on ’98 versions and discount financing on ‘99s. The only bad news in Chrysler’s report was minivan and mid-size car sales, which were down despite hefty rebates on ‘98s and ‘99s. Among other foreign auto makers that reported U.S. sales Tuesday, Mitsubishi Motors Corp. was up 12%, Subaru posted a 1% gain, BMW improved 10%, Saab rose 85%, Volvo gained 2% and BMW’s Land Rover unit was up 45%.
