Maryland new-car sales down 0.4% in May

But decline is much less than the U.S. average

July 06, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

Maryland consumers tightened their purse strings slightly in May, producing the first decline in new-car sales in the state in eight months, according to figures released yesterday by the Motor Vehicle Administration.

"Maryland's economy is very sluggish at this time," said Anirban Basu, director of applied economics at Towson University's RESI Research & Consulting. "We're still seeing large-scale layoffs, but we are doing better than most other parts of the country."

Basu attributed much of this to Maryland's being in the top one-third of the states in the nation in terms of job growth.

The decline in new-car sales of 0.4 percent in Maryland compared with a drop of nearly 6 percent for all U.S. dealers.

Maryland motorists reacted to moves by manufacturers to reduce the size of the financial incentives on new cars and light trucks, including vans, sport utility vehicles and pickups, during May.

"Most manufacturers cut back on their rebates during May," said Jerome H. Fader, president and chief operating officer of Atlantic Automotive Group, the state's largest auto retailer. Atlantic, which does business under the name of Mile One, operates 35 new-car stores in the state.

Fader said sales "tapered off a bit during May" because of reductions in rebates, "but May was still our second-best month of the year. We don't have any complaints."

Motorists acquired 37,359 new cars and light trucks during 22 selling days in May. This compares with sales of 37,494 during 21 selling days in May last year.

Basu said luxury car sales were particularly soft in May, reflecting concern about the stock market.

This resulted in a dip of $332, to $22,886, in the average price of the new vehicle purchased in the state during May.

Sales activity remained brisk on the used-car lot, a part of the business that is more profitable than new cars for most dealers. Dealers sold 60,577 previously owned cars and trucks during May. This was up 7.3 percent from May last year.

For used-car dealers, it was their best May since 1991, when the MVA resumed releasing title registration figures, which equate with sales.

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