New-car sales fall 17.6% in Md. Lower gas prices said to cause compact market to decline

March 26, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

Sales of new cars and trucks dropped sharply last month as declining gasoline prices took much of the get-up-and-go out of the compact segment of the market, according to figures released yesterday by the Motor Vehicle Administration.

Overall, new-vehicle sales in Maryland were off 17.6 percent from a strong February 1997, which was the best February for dealers since the state resumed its publication of registration figures in 1991.

"Small car sales were definitely off last month," said Jerome H. Fader, president of Heritage Automotive Group of Owings Mills. "The decline was across every line and every manufacturer."

Heritage has 19 dealerships in Anne Arundel, Baltimore, Howard and Harford counties. It sells cars ranging in size from the Kia and Geo to the Oldsmobile and Cadillac.

Fader said that mid-size cars are growing in popularity due primarily to customer rebates and financing incentives.

There are other reasons for the drops in small car sales, according to David Healy, an auto analyst with Burnham Securities Inc.

"First is cheap gas," he said. "And used cars are cheaper still, and this is killing the small car market."

Healy said that many potential new car buyers are opting for 2- or 3-year-old mid-size cars with more accessories that can be purchased for the price of a new compact. "It's cheaper to buy a 2-year-old Taurus than a new Escort," he said.

Based on its title registration figures, which equate to sales, the MVA said consumers bought 19,350 new vehicles in February. This compares with 23,942 in February 1997.

The MVA reported that total used-vehicle sales last month dipped 1.4 percent to 39,153.

Taurus seemed to benefit most from the consumer shift to larger cars. Taurus regained first place in car sales, according to Automotive News, an industry trade publication. In January, the Taurus trailed the Honda Accord, Honda Civic and Ford Escort in sales.

Ford reported sales of its smaller Escort were off 14.7 percent last month. Saturn sales dropped 20.7 percent and Nissan Sentra sales were off nearly 70 percent.

Pub Date: 3/26/98

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