Jump in new-car sales credited to promotions

Maryland reports 4.1 percent increase for best July since '91

September 05, 2001|By Ted Shelsby | Ted Shelsby,SUN STAFF

Big incentives - in some cases $2,500 and even $3,500 - are being credited for a 4.1 percent jump in new-car sales in the state during July.

Based on registration figures released yesterday by the Motor Vehicle Administration, Maryland dealers sold 35,668 cars and light trucks in July, compared with 34,271 vehicles sold during July 2000.

For dealers, it was their best July since 1991, when the MVA resumed releasing sales figures.

The jump in sales during July ended a five-month stretch during which sales were below the corresponding month of 2000.

There are two possible explanations for the gain, said Anirban Basu, director of applied economics at Towson University's RESI organization, "and only one is viable."

"One is that the economy was stronger in July and people were buying cars," Basu said. "I don't buy that."

A more logical explanation, he said, was the aggressive moves by dealers and manufacturers to clear inventory before the new models arrive by offering lucrative cash rebates.

Basu also credited the federal government's tax refund for part of the gain in sales.

The tax rebates and big incentives fueled the buying spree, Basu said. "That's my story and I'm sticking to it," he said.

"There were a lot of big, big incentives out there in July," said Peter Kitzmiller, president of the Maryland New Car and Truck Dealers Association, which represents most of the state's 350 dealers.

Bob Bell, president of Bob Bell Automotive Group in Glen Burnie, said consumers also were lured into dealership showrooms by low interest rates, in many cases less than 1 percent.

"It's no different than the real estate market," Bell said. "People look at the low interest rates and say, `This looks like a bargain and I'm going to grab it because it could go away next month.'"

The Bob Bell Group sells Fords, Chevrolets, Nissans and Hyundais at stores in Glen Burnie, Essex and Bel Air.

During July, General Motors offered a rebate of $3,500 on the Buick Park Avenue Ultra. Dodge offered $3,000 on its Ram conversion van. Oldsmobile did the same on its Bravada sport utility vehicle.

Ford gave buyers of its Crown Victoria a $2,500 rebate, the same amount offered on the Mercury Grand Marquis Villager, Dodge Intrepid and Chrysler Concorde.

There also was brisk selling on the used-car lots during July. According to the MVA, consumers bought 56,576 used vehicles during July, a gain of 12.9 percent over July 2000.

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