2 area GM plants to be closed for 2 weeks Local sales match last year's poor rate

December 01, 1990|By Timothy J. Mullaney

New-car sales in Maryland hold some good news and some bad news.

Despite the fact that the Middle East crisis has hurt consumer confidence and raised the risk of a national recession, car dealers and statistics keepers say sales are little, if at all, below last fall.

That's the good news.

The bad news is that sales are keeping up with last fall only because last fall was terrible.

Maryland dealers sold 22,806 new cars in September, the last month for which figures are available, down 6.1 percent from the 24,280 sold in September of 1989, said Jim Lang, a spokesman for the state Motor Vehicle Administration.

Mr. Lang warned that the comparisons could be less reliable than usual because the MVA is in the midst of automating its sales reporting process.

In August, sales were actually up slightly, to 28,508 new cars from 26,228, Mr. Lang said.

"In the late 1970s and early 1980s, when there was a recession, business went down for everybody," said Joseph P. Carroll, executive vice president of the Maryland New Car and Truck Dealers Association in Annapolis.

"This time, it seems to be spotty. People have good months and bad months. It's inconsistent."

Maryland's experience is broadly in line with national trends. Nationally, car sales fell to an annual, seasonally adjusted rate of 13.3 million in the first 20 days of November, down from 14.3 million in June and July, said Tom Webb, chief economist for the National Automobile Dealers Association in McLean, Va.

But sales in October were slightly higher than sales in October 1989, Mr. Webb said. See CARS, 18B, Col. 4CARS, from 12B

"The fourth quarter of 1989 was horrible for sales," he said. He said stronger fleet sales had helped overall figures stage a modest comeback in 1990 until the gulf crisis hit.

For the state, the weak car market began to affect tax receipts by September.

Receipts from the 5 percent titling tax on car sales fell by less than $1 million in July and August from 1989's levels, Mr. Lang said.

But in September, the state took in about $4.2 million less than in September 1989.

Titling tax receipts fell $24 million for the month.

Carl Brand, president of Dulaney Lincoln-Mercury in Timonium, said his recent unit sales have been

about 10 percent below last year's.

He said he has responded by trying to cut spending, especially by advertising less and carrying smaller inventories. He hasn't had to resort to layoffs, he said.

"At the dealership level, we're making it clear to our people that they have to work harder and longer" and work especially hard on following up sales leads, said Joseph A. Levy of Admiral Pontiac-Mazda in Glen Burnie.

"You have to recognize that the customer is king."

Mr. Levy said his family's two dealerships are having more frequent meetings on pricing strategy because the market is even more competitive than it was last year.

But he said dealers aren't necessarily offering bigger discounts or better deals than they were last year.

"Except for manufacturers' incentives, dealers have been working very close to the cloth for the last 18 to 24 months," he said.

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