Sales of U.S.-made vehicles jump in January

February 04, 1994|By New York Times News Service

DETROIT REUTERS AND KNIGHT-RIDDER NEWS SERVICE CONTRIBUTED TO THIS ARTICLE. — DETROIT -- Sales of U.S.-made automobiles surged in January, despite the effects of the Los Angeles earthquake and severe winter weather, suggesting that the demand for new cars and, especially, light trucks is outpacing bullish forecasts.

"The biggest problem is not the economy or the environment," said Roger Williams, president of Jack Williams Automall in Fort Worth, Texas. "It's that we can't get enough Chevrolet trucks and Jeep Cherokees to sell."

Detroit's Big Three and the major Japanese manufacturers with North American production plants sold 876,535 cars and trucks in January, up 17.7 percent from last year.

On a seasonally adjusted basis, domestic vehicles sold at an annual rate of 13.2 million in January, up from 11.6 million last year and 12.6 million in December 1993. Analysts were looking for a more modest rate of around 12.1 million last month.

"No one thought the numbers would be this strong," said JosepC. Phillippi, automotive analyst for Lehman Bros. in New York.

"If this is for real, you have to scratch your head and wonder whether the suppliers will have enough parts for all the cars that are going to get built."

Besides a shortage of some models, the strong demand has also resulted in smaller discounts and lower rebates, enhancing dealers' profits.

Al Rivera, a manager of Eger Subaru in Bridgeport, Pa., said he expected sales to remain strong through February because "many people had their cars damaged or totaled" in winter storms and would need replacements.

One factor in the sales surge is the high average age of cars and trucks on the road. The average has risen to nearly 8 1/2 years, the highest since the Korean War, according to estimates by Dean )) Witter.

Reacting to the sales report, the stocks of the biggest American automakers rose sharply in heavy trading yesterday, with shares of General Motors Corp. hitting an all-time high of $63, up $1.50. Shares of the Ford Motor Co. jumped $1.625, to $69.375, and Chrysler stock rose $1.25, to $62.50.

In recent weeks, investors have been reacting to a growing consensus among investment professionals and economists that the United States is firmly in the midst of a cyclical automotive recovery that could last through 1996.

The Big Three automakers grabbed a bigger share of the automotive market -- 74.1 percent, compared with 72.5 percent last January -- while the share of the Japanese automakers dropped to 21.9 percent, from 22.4 percent a year earlier.

The reason is twofold. Domestic models are regarded by consumers as better values because the strong yen has driven up the price of Japanese models.

And the market for light trucks, a segment in which domestic manufacturers are stronger than their Japanese competitors, has been the nation's fastest-growing.

Car sales at GM rose 13.6 percent for the month, to 211,701. Light-truck sales rose 21.7 percent, to 135,065. Sales of GM cars built in the United States, Canada and Mexico, which are considered domestic production, rose 14.8 percent, to 208,476.

Car sales at Ford rose 1.2 percent, to 133,650, from a year earlier; light-truck sales rose 34 percent, to 127,286. Sales of Ford cars built in North America were up 3.6 percent, to 132,353.

Car sales at Chrysler rose 1.3 percent, to 60,667; light-truck sales rose 18.2 percent, to 97,612. Sales of Chrysler's domestic cars were up 6 percent, to 58,356.

Detroit, whose output contributed nearly 2 percentage points to the 5.9 percent annual rate of increase of the gross domestic product in the fourth quarter of 1993, has raised its production plans for the January-March period. Yesterday's results seem to indicate that the Big Three's anticipation of stronger sales is well founded.

Toyota's imported and domestic car sales fell 4.1 percent, to 45,760; light-truck sales rose 17.2 percent, to 21,539.

Honda's imported and domestic car sales rose 14.2 percent, to 47,873.

Nissan's car sales fell 4.2 percent, to 31,529; its light-truck sales rose 33.5 percent, to 16,041.

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