Despite incentives, Chrysler's sales fall 3.4% Results match estimates of decline in industry for March

April 02, 1997|By BLOOMBERG NEWS

AUBURN HILLS, Mich. -- Chrysler Corp. said yesterday that its U.S. sales fell 3.4 percent in March from a year ago, matching expectations, with car sales weakening despite an incentive program.

The automaker said car sales dropped 8.0 percent to 74,126, even though Chrysler paid its dealers for hitting sales targets. Minivan, pickup truck and sport utility vehicle sales dropped 0.2 percent to 136,389.

The results matched estimates projecting that, industrywide, U.S. sales would fall 2 percent to 3 percent in March. With the outlook mixed, the third-largest automaker is likely to boost cash-back offers and low financing to stimulate sales and to cut car production, analysts said.

"Chrysler is going to have to limit car production over time and certainly boost incentives for April," said Smith Barney analyst David Garrity.

The year-earlier month was among the best of last year for auto industry sales, making comparisons difficult, analysts said. General Motors Corp., which reports today, and Ford Motor Co., which reports tomorrow, also are expected to post lower sales. Most European and Japanese brands are seen higher.

Honda Motor Co., the only major Japanese automaker to report yesterday, said sales declined 6.6 percent to 79,490, including its Acura luxury division. Honda-brand domestic cars fell 22 percent to 53,163. Analysts expected increased sales for Honda.

The company sold 8,981 of its new CR-V small sport utility vehicles, up from 2,988 in February.

Chrysler's truck sales, which represent about two-thirds of its total volume, are down 0.4 percent this year to date.

"You're starting to see truck sales plateau," said Dave Andrea, an analyst with Roney and Co. in Detroit. Industrywide, this year's car and truck sales are expected to be little changed from the 15.1 million of 1996.

In March, sales of the Ram full-size pickup fell 8.5 percent to 31,713, while the Dakota compact pickup was off 2.2 percent to 11,566. Among the truck models posting improved sales were the Dodge Caravan and Plymouth Voyager minivans.

Jeep-brand sport utility vehicles were up 3.0 percent, to 37,838, led by Grand Cherokee and Wrangler. Cherokee sales were lower.

Most of Chrysler's car line was down, though the Sebring convertible and Plymouth Breeze both posted 15 percent increases.

Some dealers said it took effort to match last year's strong sales level, even with the car incentive.

"We will still have a good year in 1997, but it's going to cost us more money in advertising and promotion to do what we did last year," said Mick Wolcott, owner of Mick's North Hills Chrysler-Plymouth in Pittsburgh. Chrysler's U.S. car and truck sales declined 1.9 percent in the first three months from the year-ago period.

Pub Date: 4/02/97

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