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Car Sales in U.S. Likely to Dip, Observers Say

April 07, 1998|John O'Dell

Industry-watchers somberly report that car sales in the United States are likely to decline slightly this year, but three of the four auto importers headquartered in Orange County were looking at hefty sales increases as the first quarter ended.

Led by still-expanding Kia Motors America Inc., the local importers reported a 14% hike in combined sales for the first three months. The increase came despite a continued sales slump at Cypress-based Mitsubishi Motor Sales of America Inc. Nationally, auto sales by all manufacturers were flat.

The reason for the smaller importers' gains was price, says Duane Sprague, partner at Huntington Beach-based Sprague-Fanady Marketing, an auto industry consulting firm.

With the average new car topping $22,000, importers with lower-priced vehicles are drawing price-conscious consumers like never before, Sprague said.

That helped Hyundai Motor America Inc. post a 33% sales increase through March 31, to 25,648 cars from 19,242 a year earlier. A lot of the increase for the Fountain Valley importer came from fleet sales to rental companies and businesses.

A revitalized Mazda Motor America Inc. added almost 6,500 sales to its first-quarter tally this year for a total of 56,420 and a 13% increase. The Irvine-based company has seen sales of its U.S.-built 626 sedan take off and is hoping the rest of the year will benefit from the updated version of its Miata roadster and two additions to its pickup truck line--a four-wheel-drive model and a four-door extended cab model.

Quarterly sales at Irvine-based Kia rose 136% to 19,475 cars and sport-utility vehicles from 8,246 in the first three months last year. The company's low prices helped, but Kia still is expanding and has about twice as many dealers now as it had a year ago.

Only Mitsubishi posted a downturn. Its first-quarter sales were off 13%, to 43,692 cars and trucks from 49,935. Analysts blame a weak advertising message and unfocused marketing campaign for most of the company's sales woes.

Mitsubishi also is changing over its Illinois manufacturing plant to handle the redesigned 1999 mid-sized Galant, and says sales in March suffered as supplies of the 1998 model dwindled.

In all, the four Orange County-based importers sold 145,235 vehicles through the end of March.


John O'Dell covers major Orange County corporations and manufacturing for The Times. He can be reached at (714) 966-5831 and at

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