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Sales of U.S. Cars Drop 4.6% in Mid-August : Less Demand, Imports, Car Haulers' Strike Cited

August 24, 1985|STEPHANIE DROLL | Times Staff Writer

DETROIT — Sales of American-made cars fell 4.6% in mid-August from the year before, the auto makers reported Friday.

Industry analysts blamed several factors--an overall weakening in demand, increased competition from imports and the car haulers' strike that cut off the supply of new cars to dealers.

The 19-day strike by 20,000 Teamsters ended Aug. 18 when drivers agreed to return to work after a tentative contract was approved by union leaders.

"We were just starting to see the effect of the strike on car sales in the first 10 days of August," said Harvey Heinbach, an auto analyst with Merrill Lynch in New York. He added, however, that even without the strike sales of domestic cars would still have been in the "doldrums."

Imported makes report their sales only on a monthly basis.

Cut-Rate Financing

In an effort to counter the lagging sales and clear out unsold 1985 models, General Motors announced a week ago that it would offer cut-rate 7.7% financing on most remaining 1985 models. Chrysler, Ford and American Motors quickly followed with their own incentive plans.

Although GM's sales were down 5.3% in the Aug. 11-20 period, officials said the discount loan program had begun to improve sales.

"We expect to see the first major effect of this program in the final 10 days of August," said James G. Vorhes, GM vice president in charge of sales and service.

Analysts agreed that the incentive programs should provide a boost for sales, but they warned that, when the cut-rate loan programs expire--which is scheduled for October--the auto makers could face depressed sales, since some consumers may buy sooner than they had originally planned.

On a seasonally adjusted basis, car sales in mid-August equaled an annual rate of 7.9 million, an improvement over early August's annual rate of 7 million but down from the 8.1-million rate recorded in the same period last year.

Auto Sales

Aug. 11-20 Aug. 11-20 % 10-Day 1985 1984 change GM 106,333 112,259 -5.3 Ford 39,865 46,138 -14.5 Chrysler 25,348 21,863 +15.9 AMC * 2,700 4,800 -43.7 VW U.S. 1,793 1,624 +10.4 Honda U.S. 3,663 2,525 +45.1 Nissan U.S. 744 -- -- TOTAL 180,446 189,209 -4.6

* Estimate

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