Md. car dealers slash price tags to improve sales

September 24, 1992|By Ted Shelsby | Ted Shelsby,Staff Writer

It's a buyer's market.

So says Alan Abramson, head of Archway Ford in northwest Baltimore. Even his hotter selling models, such as the Taurus sedan and Explorer sports utility truck, are in plentiful supply, and competitive pressure has dealers around the state discounting them more than usual.

"There is too much merchandise chasing too few customers," Mr. Abramson explained. "It's getting cutthroat out there as dealers cut prices to get rid of inventory."

Figures released yesterday by the Maryland Motor Vehicle Administration showed why dealers are trimming prices in an effort to move cars out of their showrooms and lots.

Sales are off nearly 2 percent this year compared with the same period in 1991, which was the industry's worst-selling period since the recession of 1983.

For August, new car sales were down 4 percent, compared to August 1991, according to the MVA's title registration figures.

Mr. Abramson blamed the lackluster sales throughout the state on what he believes is a lack of consumer confidence about the economy. He said people in certain industries, including those who work for defense contractors, do not appear sure they will have jobs tomorrow.

Other sales figures released by the National Automobile Dealers Association suggested that Marylanders were being more cautious about making major purchases, such as a new car, than consumers in other parts of the country.

For the entire nation, the NADA reports that sales were down only one-tenth of a percent last month. For the first eight months of the year, it reported that car and light truck sales were up 3.4 percent.

Ted Orme, a NADA spokesman, said the recession had weakened the industry. About 1,600 dealers have gone out of business since 1990.

While the car trade association thinks that most of the damage of the recession is over, Mr. Orme said most dealers were still not making money selling new cars.

"They are making enough off their used car sales," he said, "to cover their losses on new car sales. If they are making money," he added, "it's from the service and parts side of the business."

Maryland dealers sold 26,408 new vehicles last month, compared with 27,496 in August 1991.

Budget-conscious motorists in the state bought 41,346 used cars last month, at an average price of $4,343. In August 1991, used car sales totaled 43,336 units.

Mr. Abramson noted that his son was about to receive his doctorate in aeronautical engineering. "I may be getting another salesman," Mr. Abramson said.

New cars sold

Month .. .. 1991 .. .. 1992 .. .. .. % Chg

Jan. .. .. 21,253 ..18,232 .. .. .14.2

Feb. .. .. 15,884 ..15,153 .. .. .. 4.6

March .. ..19,521 ..22,352 .. .. +13.5

April .. ..26,866 ..24,025 .. .. ..10.6

May .. .. 26,467 ..24,771 .. .. .. 6.4

June .. .. 23,888 .. 29,946 .. .. .+25.4

July .. .. 26,449 .. 23,751 .. .. ..10.2

Aug... .. 27,496 .. 26,408 .. .. .. 4.0

TOTALS

(8 mos.) .. 187,824 .. 184,638 .. .. 1.7

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