Sales of Autos Fall 4.1% in March
Despite predictions of a double-digit, war-related slump in auto sales, automakers on Tuesday said their sales fell just 4.1% in March from the year-earlier total as Asian automakers posted strong gains.
“We’re in shock,” said Fritz Hitchcock, owner of a Puente Hills-based chain of five car dealerships. “It wasn’t supposed to be this good.” All five of his stores reported sales gains in March over February, he said, and that ran the gamut from sport utility vehicles to small cars.
Although gasoline prices soared in mid-March to record highs across the country, SUV sales climbed 8.6% for the month. Many analysts have said that while consumers will complain about $2-a-gallon gasoline, they won’t substantially change their buying habits until prices hit and stick at $3 a gallon.
Overall, last month’s sales of light trucks -- a category that includes minivans, pickups and SUVs -- increased their sales lead over more-fuel-efficient passenger cars.
“The industry has shown surprising resilience, a strong indication of the underlying health of the economy,” said Jim Press, chief operating officer of Toyota Motors Sales USA, based in Torrance.
Honda posted a 16.2% gain for the month; Hyundai’s sales were up 20.3%; and Subaru said its sales climbed 29.5%. Toyota posted a 5.1% increase. Suzuki’s sales rose 17.2%.
Not all import carmakers had a great month. Nissan’s sales were off 8.8% in March, while Mazda reported a 17.7% drop and Volkswagen sales fell 16.9%
And all of the domestic carmakers saw their sales fall: Ford led with a 7.9% sales decline, followed by General Motors, off 6.8%, and Chrysler, down 6.6%.
March sales of 1.45 million vehicles were down from 1.52 million in the same month last year. Truck sales accounted for 52% of unit sales in March, up from 51% a year earlier.
“It was a surprising month,” said David Healy, industry analyst with Burnham Securities Inc. “It started slow and picked up, especially in the third week when the war with Iraq started and the stock market took off.”
Car dealers say they also are seeing the drawing power of incentives.
Automakers’ incentives averaged just over $3,200 per car, with discounts of as much as $4,000 on some domestic brands leading the pack. Asian automakers spent an average of $1,500 per car, less than half that spent by Ford, GM and Chrysler, according to CNW Marketing Research, an Oregon firm that tracks incentive spending.
However, the incentive wars were cranked up Tuesday as GM said it would offer interest-free financing for up to 60 months on all of its vehicles, except the Hummer SUVs. Chrysler and Ford followed with similar offers, although both limited the number of models qualifying for interest-free deals. All three companies also offer cash incentives in lieu of the discounted financing.
Separately on Tuesday, federal regulators announced that automakers will be required to improve the average fuel economy of their truck products to 22.2 miles a gallon by 2007, an increase of 1.5 miles a gallon from the present standard.
