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'87 U.S. Auto Sales Trail Record in '86; GM's Slide 21.6%

January 07, 1988|LESLIE ERINGAARD | Times Staff Writer

DETROIT — U.S. auto sales in 1987 failed to match the records set in 1986, with industry leader General Motors suffering a drastic 21.6% sales decline.

Car sales dropped 10.2% in 1987 from the year before, the automobile industry reported Wednesday. In all, auto makers sold 10.3 million cars in 1987, about 1.1 million fewer than the 11.4 million sold in 1986.

Importers fared better than domestic auto makers even though the rising dollar led some importers to raise prices several times last year.

"1987 certainly isn't bad; 1986 was better," said Chris Cedergren, an analyst with J. D. Power & Associates, the Westlake Village automotive consulting firm. "1987 was extremely competitive--a trend that's going to continue.

"We saw Japanese import penetration grow, although Japanese car prices went up dramatically, because of the increase of the yen."

1986 was a record year for car sales largely because many consumers rushed to take advantage of tax deductions that expired on Jan. 1, 1987. Auto analysts had expected 1987 sales to fall short of the 1986 record.

While imported car sales dropped 2.7% in 1987, domestic car sales were down 13.2%. While GM was down 21.6% and Chrysler an estimated 18.9%, buoyant Ford kept its decline to just 2.3%.

Ford was also boasting that its Escort and Taurus were the year's best-selling cars.

Among the imports, Toyota sold the most cars but was down 7.7% from the year before. Honda, down 8.0%, overtook stumbling Nissan, whose sales tumbled 17.2%.

Hyundai and Mitsubishi, both relative newcomers to the U.S. market, showed strong gains.

Last year was a tumultuous time for auto makers, and not just because of the slump in sales of U.S.-built cars.

The precipitous fall of the U.S. dollar strongly affected the prices and production costs of cars and seemed to rewrite the rules of international competition in the auto industry.

In a twist of fate that would have been improbable just two years ago, Ford and GM bragged last autumn of plans to turn the tables on the likes of Toyota and Nissan, and step up exports to Japan in 1988.

Importers found themselves at a growing disadvantage, as the dollars paid by U.S. car buyers converted into fewer and fewer yen, deutschemarks and won for them to pay their workers. Honda and Toyota's answer was to announce plans to invest more than $800 million in additional U.S. production. On Nov. 13, hard-hit Porsche said it would cut back production and reduce workweeks in West Germany because of shrinking U.S. sales.

1987 was also a year that saw venerable American Motors disappear. Chrysler bought it in August, and AMC sales are now included in Chrysler's sales totals. (In fact, Chrysler said Wednesday that its computers failed to complete on time the combined totals for the two companies; as a result, year-end figures for Chrysler were only estimates.)

The year could have been worse, as both GM and Ford faced the possibility of strikes by the United Auto Workers. But the two companies reached labor agreements providing an unprecedented measure of job security for workers.

General Motors' image sagged throughout the year, battered by decreasing sales and market share. However, the company moved to boost its stock price and improve investor relations with a stock buyback plan and an elaborate public relations campaign.

The world's largest auto maker is currently staging an elaborate technology show at New York's Waldorf-Astoria hotel to repair its image and trigger a revitalization of the company. GM pointed out that it had the most cars on the list of last year's 10 best-selling models.

"We are optimistic about 1988," said C. N. (Bud) Moore, sales vice president. Moore said he expects the new Buick Regal, the Pontiac Grand Prix, the Buick Reatta and the Oldsmobile Cutlass Supreme to be hot sellers in 1988. The 1988 Grand Prix SE was this week named Motor Trend magazine's 1988 Car of the Year.

Experts have disagreed about the impact of the stock market's slump on the auto industry. But at least a few dealers were hurt badly. "People think of their employment, and they stopped buying. After the Oct. 19 stock market crash, we noticed our sales dropping at least 25%," said Ziad Alhassen, president and part owner of West Covina Mitsubishi Yugo, the nation's largest Mitsubishi dealer, according to Auto Age magazine.

For December, auto sales dropped 16.3% in 1987. Domestic auto sales fell 18.4% in the month, while imports fell 11.7%. GM's reported a sales drop of 19.0% in December, while Ford--in an unusual twist--posted a slightly larger sales decline than GM. Ford's sales fell 23.4%. Chrysler's estimated car sales were down 15.6%.

Times Staff Writer Keith Bradsher in Los Angeles contributed to this report.

BEST-SELLING MODELS IN 1987

Sales through November

Ford Escort 364,343

Ford Taurus 322,328

Chevrolet Celebrity 283,947

Chevrolet Cavalier 276,333

Hyundai Excel 244,265

Oldsmobile Cutlass Ciera 228,582

Honda Accord 210,010

Ford Tempo 199,392

Pontiac Grand-Am 197,880

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