New-car sales are running in reverse in Maryland Nationwide boom bypasses the state

June 15, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

The new-car sales boom that has been sweeping the nation continues to bypass Maryland, according to figures from the state Motor Vehicle Administration.

Sales of new cars and trucks in Maryland were 1.2 percent lower last month than in May 1995. That dip compared with a 7 percent rise in sales nationally.

For the country as a whole, 1996 sales have been better than analysts and industry executives had expected. Sales have been higher in each of the first five months of the year, compared with the comparable period of last year.

The industry is on a pace to sell 1.2 million more vehicles this year than in 1995, a healthy gain of about 8 percent.

It's an entirely different story in Maryland. The industry here is still trying to get out of reverse.

While some dealers may be having good years, the overall picture is not pretty, according to MVA registration figures that equate to vehicle sales.

Maryland dealers have posted declines in four of the first five months of 1996. In February, the only month in which dealers sold more vehicles than in the same month the previous year, sales were up only 0.6 percent.

"I don't know why business is so bad in Maryland," said William A. Hurwitz, president of Fox Automotive Inc., which operates eight domestic and foreign dealerships in the Baltimore area and Laurel. "This has been a frequent topic of discussion with my management staff."

Part of the reason, he said, has to do with the financing.

"Overextended credit seems to be a bigger problem in Maryland than in the rest of the country," he said.

Hurwitz said that General Motors Acceptance Corp., the financing arm of the nation's largest automaker, is rejecting more potential buyers with marginal credit ratings now than in the past.

"GMAC used to finance 85 percent of everything we sold," he said. "Today, it's 42 percent."

Jacob J. Cohen, a partner and head of the automotive division at Walpert, Smullian & Blumenthal, a Towson accounting and management consulting company, attributed the drop in car sales to economic and social changes.

He said the region suffers from shrinking state and federal government employment.

"The shrinking of defense contractors is another factor," Cohen said.

"There is still a feeling of insecurity among many people, and they are less likely to commit to major purchases at this time."

Cohen said there has also been a change in attitude on the part of consumers toward automobiles.

"They are now viewed as necessary transportation, rather than a status symbol," he said. "It is not a stigma anymore to drive an old car or to buy a used car."

John W. Miller, owner of Miller Bros. Chevrolet-Geo in Ellicott City, blamed the lackluster sales, in part, on a change in the regional market and the auto manufacturers' inability to adjust.

He said trucks now account for slightly more than half of his business, and the dealership has difficulty obtaining enough of the hot-selling models, including four-wheel-drive units, to meet customer demand.

Miller said that 10 years ago he would sell only one truck for every three cars sold. He estimated that total sales at his dealership would have been up 10 percent if there were more trucks on the lot.

According to MVA figures, dealers sold 32,659 new cars and light trucks last month. That was down from the 33,045 vehicles sold in May 1995. Dealers had 22 selling days each month.

Sales of used cars also posted a slight decline. Sales totaled 50,456 last month, compared with 50,741 in May 1995.

Pub Date: 6/15/96

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