State's new car sales fall 9.2% for 8th straight monthly drop Some are baffled since U.S. trend and Md. economy are strong

Auto industry

May 28, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

New car sales continue to sputter in Maryland, falling 9.2 percent last month, according to figures released yesterday by the Motor Vehicle Administration.

The decline marked the eighth consecutive month in which sales were lower than in the corresponding period of the previous year. Sales have been off in 11 of the past 12 months.

"Very interesting," said Michael Funk, a research economist with the Regional Economic Studies Institute at Towson University, who noted that the figures "are not reflective of the state's economy."

"Business is not bad," said car dealer Robert Russel, "but it's still down from last year, and I don't know the why."

Russel is president of R&H Motor Cars Ltd. in Owings Mills and chairman of the Maryland New Car and Truck Dealers Association, a trade group representing 320 new car dealers in the state.

According to title registrations, the MVA said, consumers bought 29,344 new vehicles in April.

That compares with 32,328 bought during the corresponding period last year.

The MVA reported that sales of used vehicles totaled 50,015 in April -- down 7.8 percent from the 55,332 units sold in April 1997.

Dealers had 22 selling days in each period.

According to the MVA, the average price of a new car was $20,762. That was $747 below the average price in March, and reflected the industry's strong use of incentives last month to boost sales.

In other parts of the country, the costly payouts seemed to work. LTC Nationwide, sales of car and light trucks were up 6.1 percent last month, according to Automotive News, an industry trade publication.

Funk said auto sales in Maryland are on their own cycle and not linked to the state's robust economy. He pointed out that Maryland's economy was flat in the early 1990s but started expanding in 1993 and 1994.

With better times came a jump in consumer confidence and auto dealers shared in the good times. Maryland new-car sales jumped 15.6 percent in 1994. Sales totaled 349,293 that year, the best year since the state resumed publishing registration figures in 1991.

Funk believes the strong showing in 1994 actually tapped into future sales.

"Auto buyers are not just driven by the economy," he said, "they are influenced by the age of the fleet."

Cars last longer today, he said, and motorists who bought just a few years ago may not be ready to buy a new model.

Richard Wagoner Jr., president of GM's North American operations, told Automotive News last week that, in addition to lasting longer, new cars are competing with high-end electronics and computers for the consumer's dollar.

"Vehicles are less a fashion item to a lot of people," he said.

Mark Growden, president of Growden Lincoln Mercury in Cumberland, said he thinks low-mileage used cars coming from rental fleets are also stealing some new car business.

"I just bought four Mercury Mystiques," he said. "Each has 12,000 miles or less, and they will sell for $5,000 less than their sticker price six months ago."

Despite a soft market, Russel said, some models did extremely well last month. Mercedes-Benz sales jumped 75 percent last month.

Volkswagen sales rose 59 percent and those of Lexus were up 55 percent.

Eagle, made by Chrysler Corp., posted a 68 percent drop in sales, followed by Hyundai, down 37 percent; Nissan, 26 percent; Pontiac, 14 percent; and Mitsubishi, 12 percent.

Pub Date: 5/28/98

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.