June sales of new cars increased 0.8% in Md.

State's economy shows strength amid nationwide dip of 5.3%

August 14, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

New-car sales, a carefully watched barometer of Maryland's economy, posted a small gain in June and were stronger than those in most parts of the country.

Dealers in the state sold 0.8 percent more cars than they did during June of last year, according to figures released yesterday by the Maryland Motor Vehicle Administration. That compared with a decline of 5.3 percent in sales nationally.

The picture is pretty much the same for the first six months of the year.

While new-vehicle sales were up 2.5 percent in Maryland, they were down 3.1 percent nationwide.

"This is telling us that our economy is holding up as well, or perhaps even slightly better, than the national economy," said Anirban Basu, director of applied economics at Towson University's RESI Research & Consulting.

"It is telling us that Maryland consumers are better-positioned financially to take advantage of the incentives offered by the auto manufacturers because we are an affluent state. The consumer is holding up our economy, and that shows in the interest-rate-sensitive areas of housing and auto sales."

Basu said Maryland continues to benefit from a hefty increase in federal spending in the areas of defense, medical research and homeland security.

"All the dealers that I talked to said business was pretty good in June," said Joseph Aiello, president of JBA Chevrolet and Mitsubishi in Glen Burnie and secretary-treasurer of the Maryland New Car and Truck Dealers Association, a trade group representing most of the state's 350 new-car dealers.

General Motors Corp. was one of three major manufacturers to record sales gains in June, said Paul Taylor, chief economist at the National Automobile Dealers Association.

He said Hyundai and Kia also had higher sales.

Taylor said that although sales of luxury cars have been pinched by the stock market fluctuations in recent months, "Cadillac is having a stellar year," with sales up 18 percent in June and 12 percent in the first half of the year.

Maryland motorists purchased 36,348 new cars and light trucks, including pickups, vans and sport utility vehicles, in June.

That compared with sales of 36,045 in the corresponding period last year.

During the first six months of the year, new-vehicle sales in the state totaled 203,010, up from 198,122 in the like part of last year.

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