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Sales of U.S. Cars Show a Lackluster 5.7% Gain

November 14, 1986|STEPHANIE DROLL | Times Staff Writer

DETROIT — Sales of new domestic cars in early November continued to suffer from the expiration of massive incentive programs as dealers delivered just 5.7% more cars than in the depressed 1985 period.

Sales in both this year's and last year's Nov. 1-10 period reflect the ending of consumer campaigns designed to clear dealer lots before the introduction of new models.

The seven U.S. auto makers said they sold 155,280 new cars in the most recent period, up from the 146,970 sold in the comparable period last year.

General Motors, which recently announced that it plans to close 11 plants as a cost-cutting measure, reported a 5.2% decline in sales. Ford, aided by the success of its Taurus and Sable car lines, said its sales increased 32.8%, while the No. 3 U.S. auto maker, Chrysler, posted a 1.4% sales gain.

Industry analysts said that unless the current sales rate picks up, the auto makers may be forced to cut production and introduce a new round of incentives in order to prevent bloated inventories.

"U.S. manufacturers built about 30,000 more cars than they sold in the first 10 days of the month," said John Hammond, an auto analyst with Data Resources. "If the sales pace remains the same, the . . . supply of cars will be over 70 (days) by the end of the month, and that's usually a signal that incentives are on their way." A 60-day supply is considered normal.

Among the smaller manufacturers, American Honda's sales continued to boom, up 110% for the period. Nissan U.S. said its sales increased 27.5%, American Motors posted a decline of 51.3% and Volkswagen of America's sales were off 25.8%.

Toyota, which began producing cars in the United States last month at the Fremont, Calif., plant it owns jointly with GM, said it sold 215 U.S.-built Corollas in early November.

Adjusted for seasonal variations, domestic new cars sold at a weak annual rate of 6.2 million in the Nov. 1-10 period, up slightly from the 5.9-million annual rate posted in the year-ago period. When sales peaked under the incentive programs in September, the annual rate shot up as high as 17 million.

The annual rate is a reflection of the number of cars that would be sold if a period's sales pace were to continue for a full year.

Auto Sales

Nov. 1-10 Nov. 1-10 % 10-Day 1986 1985 change GM 82,729 87,224 -5.2 Ford 41,492 31,248 +32.8 Chrysler 21,181 20,895 +1.4 AMC* 1,120 2,300 -51.3 VW U.S. 831 1,120 -25.8 Honda U.S. 6,055 2,883 +110 Nissan U.S. 1,657 1,300 +27.5 Toyota U.S. 215 -- -- TOTAL 155,280 146,970 +5.7

* Estimate

Los Angeles Times

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