Domestic New Car Sales Decline 36.9%

DETROIT — Domestic new car sales in mid-January plunged 36.9% below the comparable 1986 levels, continuing the sales slump that began with the new year.

The seven U.S. auto makers said on Friday that they sold a total of 125,774 cars in the Jan. 11-20 period, down considerably from the 199,246 sold in the comparable period last year.

Moving to boost lackluster sales, four divisions of General Motors announced on Friday that they would offer incentives on selected models. Buick, Oldsmobile and Pontiac said that from Jan. 24 to April 30 they would offer various discounts on options. The Chevrolet division said it will offer rebates of $500 to $1,000 on selected models.

Earlier this week, Chrysler extended the low-financing and rebate incentives it is offering on selected models and Ford is expected to respond with a program of its own on selected car models.

Industry analysts said the current weak sales could be largely attributed to the sales boom at the end of the year, which was sparked by consumers rushing to make major purchases before the new tax laws took effect.

“It’s premature to say that the market is weakening,” said Ted Sullivan, an auto analyst with Chase Econometrics. “This is the second 10-day period that’s been really soft, but much of that is due to consumers buying in advance because of tax reform.” Under the new tax law, sales taxes are no longer deductible.

Industry observers point out, however, that the current incentives programs are not as far-reaching as many of the programs have been in the past and will not prompt a surge in sales.

GM, with a 42.3% drop in sales, reported the steepest decline of the Big Three for the mid-January period. Chrysler said its sales were off 33.7% and Ford reported a decline of 31.8%. Volkswagen of America said sales of its U.S.-built cars were off 48.6%and American Motors said its sales fell 47.7%.

Only the Japanese auto makers reported increases in the sales of cars they make in the United States. American Honda said its sales were up 41.3%and Nissan U.S. reported a modest gain of 0.9%. Toyota, which recently began selling cars it produces jointly with GM in Fremont said it sold 384 of those units in the January 11-20 period.

On a seasonally adjusted basis, domestic new cars sold at an annual rate of 6.2 million in mid-January, down from the 9.9 million annual rate posted in the same period last year. However, since most of the auto makers had extensive incentives in effect during the 1986 period, sales were exceptionally strong.

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

Jan. 11-20 Jan. 11-20 % 10-Day 1987 1986 change GM 67,549 117,014 -42.3 Ford 33,838 49,616 -31.8 Chrysler 16,306 24,577 -33.7 Honda U.S. 4,018 2,843 +41.3 AMC* 810 1,550 -47.7 VW U.S.* 842 1,637 -48.6 Nissan U.S. 2,027 2,009 +0.9 Toyota U.S. 384 -- -- TOTAL 125,774 199,246 -36.9

*Estimate

Los Angeles Times