Sales of domestically built new cars rose slightly in mid-October, compared to the year before, but analysts said Thursday that demand remains weak as consumers react to the end of cheap financing deals that boosted car sales to record levels in September.
The seven U.S. auto makers said they sold 166,445 cars in the Oct. 11-20 period, up 2.3% from the same period last year but down from 247,623 in the first 10 days of the month. Most of the discount financing incentives that the major domestic manufacturers were offering on leftover 1986 models expired Oct. 8.
The year-ago period's sales were also hurt by the end of sales incentives.
"Mid-October's soft sales are a carbon copy of last year," said Ted Sullivan, an industry analyst with Chase Econometrics. "Incentive programs borrow sales from the future. And sales were suffering through the same post-incentive period last year."
Sullivan said he expects sales to remain soft through the end of the year unless the auto makers revive the pace with another round of incentives. Given current production schedules, he added, manufacturers will be forced either to prop up sales with another consumer campaign or reduce output to prevent a backlog of unsold cars.