DETROIT — Wall Street analysts, who for months have been expecting a slump in car sales following last October's stock market crash, were confounded once more on Wednesday.
New domestic car sales rose 11.9% in the mid-February sales period, compared to the same period a year ago, the eight domestic auto manufacturers reported. Cars sold at a healthy annual rate of 7.3 million units during the period of Feb. 11-20.
Improved sales were cited in an announcement Wednesday by General Motors. The company said it has boosted production plans for 1988 by 175,000 cars and trucks and will recall 8,600 laid-off workers, including those at the GM plant in Van Nuys. (Details in Metro.)
Ford and Chrysler have also announced plans to boost production this year.
'Willing to Buy'
The sales numbers so far this year are "certainly running better than what we've been expecting," said Harvey Heinbach, an auto analyst with Merrill Lynch.
"The seasonally adjusted annual rate is running ahead of last year. We've been looking for the sales rate to fall off, particularly after the stock market decline . . . (but) consumers don't seem to be concerned," Heinbach added.
"I continue to be very surprised at the strength of auto sales," said Theodore Sullivan, auto analyst with WEFA Group, a Bala Cynwyd, Pa. economic research firm. "We've been expecting the seasonally adjusted rate to be a million units lower. Incentives helped push up the sales somewhat, but only by about half a million units."
Even without the incentives, "the market is still extremely strong," he said.
Sullivan added that auto analysts have erred in their forecasts on the strength of the auto industry, in part because many assumed consumers would take a more cautious attitude toward large purchases after the stock market crash. Instead, consumer confidence rebounded within six weeks of the crash, Sullivan observed.
"Consumers brushed off the impact of the stock market crash, and they appear to be willing and able to buy," Sullivan said.
The "Big Three" auto manufacturers--General Motors, Ford and Chrysler--all reported that their sales were up from the comparable sales period in 1987. GM's sales rose 16.3%; Chrysler's sales were up 21.7%, and Ford's sales increased 2.2%.
Meanwhile, Honda, Nissan and Volkswagen reported that their U.S.-built car sales were lower than in last year's mid-February period. Honda's car sales were down 4.5%; Volkswagen's auto sales dropped 23.9%, and Nissan's sales of domestically produced cars fell 10.7%. Mazda, which began U.S. production last September, sold 569 U.S.-built cars.
Feb. 11-20 Feb. 11-20 % 10-Day 1988 1987 change GM 106,667 91,716 +16.3 Ford 60,545 59,225 +2.2 Chrysler 32,673 26,855 +21.7 Honda U.S. 5,926 6,208 -4.5 VW U.S. 1,159 1,522 -23.9 Nissan U.S. 1,599 1,791 -10.7 Toyota U.S. 1,178 684 +72.2 Mazda U.S. 569 -- -- TOTAL 210,316 188,001 +11.9
There were nine selling days in the period this year and last year.