U.S. car sales on a roll, May data show

June 04, 1993|By New York Times News Service

DETROIT -- Sales of cars and light trucks built in North America rose 9.8 percent in late May, the nation's automakers reported yesterday, extending a string of increases and suggesting that automotive demand may be stronger than predicted by broader economic indicators.

The rise in the last 10 days of the month followed an 18.4 percent gain in the middle of May and a 30.2 percent surge in the month's first 10 days. For all of May, sales of all vehicles, domestic and imported, rose 15 percent from May 1992.

Ford Motor Co. said it had record truck sales for the month, and Chrysler Corp. had its best May sales in five years.

General Motors Corp. also reported higher May sales, although more modest than Ford's and Chrysler's. It attributed its gains to a conservative pricing strategy, under which it avoided price increases to build market share.

Auto executives and analysts attributed the robust sales to low interest rates for financing, strong demand for low-cost lease deals and the need to replace aged vehicles.

Tom Webb, chief economist of the National Automobile Dealers Association, theorized that low interest rates might be motivating savers to cash in certificates of deposit and buy vehicles.

"New-vehicle sales in April and May were higher than household-income data alone would suggest," he said, providing evidence that consumers were using their savings to buy vehicles.

Car dealers reported that the proportion of light-truck sales to total automotive sales continued to rise. They also noted a shift in consumer interest from low-mileage used cars to new cars. And they said domestic brands continued to gain against foreign nameplates.

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