Automakers say sales were strong late last month

July 07, 1992|By New York Times News Service

DETROIT -- The nation's auto industry reported yesterday strong sales for late June, propelled by what executives said was rising consumer confidence and a stronger economy.

The news seemed to run counter to the gloomy economic picture painted by last week's report that the nation's unemployment rate had risen sharply in June. But auto executives said the cut in interest rates that followed the release of the jobless data would help the industry.

"With the recent reduction in short-term interest rates, we expect to see even stronger vehicle sales in the second half of the year," said James B. Fitzpatrick, vice president of marketing at General Motors.

Analysts said a "Buy America" preference among consumers had helped Detroit's Big Three gain ground against Japanese competitors. GM's Saturn division had a particularly strong month.

Sales of vehicles built in North America -- which are considered domestically built -- rose a sharp 23.9 percent in the last 10 days of the month compared with the period a year earlier. Car sales rose 15 percent, to 244,473, and light-truck sales gained 40.7 percent, to 157,284.

The seasonally adjusted annual selling rate of North American-built cars for the period of June 21-30 was 7.5 million. For the month, the rate was 6.7 million, up from 6.3 million in May but below the 7.3 million in June 1991.

For the entire month of June, sales of all cars and light trucks, which include minivans and sport-utility vehicles, surged 6.2 percent, to 1,268,954, from 1,149,021 last year. June car sales were up 2.5 percent, to 826,942, and light-truck sales rose 14 percent, to 442,012.

Because light-truck sales have gained so much more than car sales -- and the Big Three, GM, Ford and Chrysler, are much stronger than the Japanese in light trucks -- Detroit has been TTC able to score a significant gain in overall market share.

Taking into account cars and light trucks, imported and domestic, the Big Three captured 71.8 percent of all sales in June, up from 69.7 percent of all sales in the month a year earlier. That left the Japanese automakers with 22.7 percent of sales, including output from North American-based transplants, down from 24.5 percent a year earlier. Other importers, principally from Britain and Germany, sold 5.5 percent of all vehicles, down from 5.9 percent from last year.

"The latest 10 days are very good news, because it means that dealer inventories will be in good shape, and that bodes well for production schedules," said Harvey Heinbach, automotive analyst for Merrill Lynch in New York. "We haven't been able to say that in a while."

Sales of GM's domestically produced cars rose 18.4 percent in ** late June, to 106,857, led by strong increases at all divisions except Chevrolet, which suffered a 3.5 percent decline. Sales of GM's domestic light trucks rose 34.3 percent, to 57,527.

The Saturn division sold more than 20,000 cars in one month for the first time. At that rate, Saturn could be approaching capacity at its two-year-old plant in Spring Hill, Tenn.

"We had a tremendous Fourth of July weekend, and we don't have many Saturns in stock," said John B.T. Campbell III, who owns several dealerships in Southern California.

Ford Motor Co.'s car sales rose 30.7 percent in late June, to 61,952, and the company's light-truck sales rose 39.3 percent, to 51,834. Robert L. Rewey, vice president of sales operations, noted that the midsized Taurus, which was redesigned for 1992, had its best sales month since May 1989.

But Ford injected a note of caution by saying strong orders for cars from rental companies had inflated its results. Some rental companies were caught short of cars when airlines lowered fares and caused a surge of travelers, Ford said.

But Stephen Girsky, automotive analyst for Paine Webber in New York, said Ford's sales to rental fleets would help the company's profits because they reflected genuine demand caused by a greater volume of travelers rather than steep discounting.

General Motors said it had not experienced a similar phenomenon in its rental sales.

Chrysler Corp. said car sales for all of June declined 12.2 percent, to 54,255, while light-truck sales, led by its popular mini-van, rose 23.1 percent, to 101,438.

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