Sales of new and used cars in Maryland dropped nearly 44 percent in July, compared with the same month last year, according to state statistics.
Spokesmen for Maryland's auto industry were at a loss to explain the dramatic decline, which hit a business already riding out a prolonged sales slump. One suggested that the U.S. military intervention in the Middle East might have been a factor, although the effects of Iraq's Aug. 2 invasion of Kuwait will not appear until the August sales figures are ready.
Further clouding the auto industry picture for Maryland, as well as for the rest of the nation, is the possibility of a United Auto Workers strike against General Motors at midnight tomorrow. Union officials in contract talks with the Big Three U.S. automakers have picked GM as their strike target.
The Maryland sales figures tabulated for July are the most recent available and indicate that 20,573 cars and light trucks were sold in the state that month, Motor Vehicle Administration statistics show. That compares with 36,516 vehicles sold during July 1989, a 43.6 percent drop in sales. Sales figures for July 1989 are in line with those of July 1988, when 35,523 cars and light trucks were sold.
Nationwide, sales of cars and trucks were down 3 percent in July compared with July 1989, said Thomas Webb, chief economist with the National Automobile Dealers Association. Asked whether he knew what might have precipitated Maryland's slide, Mr. Webb said, "I couldn't guess on that one."
Officials of the Maryland New Car and Truck Dealers Association were similarly baffled. The association's president, Gary Hurley, was out of town yesterday and unavailable for comment, but two other officers, who asked not to be identified, said they couldn't explain the sales dip.
Tuesday, before the MVA statistics were released, Mr. Hurley spoke of how Maryland's auto dealers had been weathering the slump in sales. For the last year and a half, dealers have conducted a flurry of rebate campaigns and other financial incentives to spur buying in a weak market, which he attributed to tight credit and a slow economy.
Other dealers have implemented belt-tightening measures such as cutting down on inventories and on advertising and not replacing employees who quit or retire, he said.
"Maryland is following the rest of the country: We're at a low ebb," said Mr. Hurley, who owns City Oldsmobile in Baltimore. "We're all optimistic; we have to be. But I don't see any relief until the spring of 1991."
Asked why he picked that time, Mr. Hurley said auto sales have always been cyclical and that spring is usually a good season for new-car purchases.
Joseph Levy, who owns Admiral Pontiac in Anne Arundel County, also was optimistic.
"The worst is behind us," he said. "We [Admiral] made the necessary cost adjustments about 18 to 20 months ago, when we foresaw that 1989 was going to be a difficult year. We had hoped that we would have pulled out of the sluggish market by the middle of 1990. That hasn't occurred as of yet, but frankly, I do see some light at the end of the tunnel."
Nationwide, seasonally adjusted auto sales bottomed out in March and were on their way up until Iraq invaded Kuwait, industry analyst Ronald A. Glantz said.
"When the crisis is over, sales should almost immediately rebound," said Mr. Glantz, who works for Dean Witter Reynolds Inc.
Maryland has about 400 new-car dealers with about 20,000 employees, according to the state association of new-car dealers. Only two Maryland dealerships -- Inner Harbor Ford and Sherwood Ford -- have closed in the last 18 months, Mr. Hurley said. Sherwood since has reopened under new ownership.