New-car dealers in Maryland enjoyed best August since 1991

But 4% sales gain trails national increase of 17%

October 05, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

Spurred on by record incentives, Maryland consumers bought more new cars during August than during any month since last October, according to figures released by the Motor Vehicle Administration.

Dealers sold 38,965 new cars and light trucks during August, a gain of 4 percent over a strong August 2001.

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

Anirban Basu, director of applied economics at Towson University's RESI economic research institute, said that while new-car sales are still a leading economic indicator, they are being influenced by the auto manufacturer's zero-percent financing plans and lucrative rebates.

Basu said the MVA numbers "tell us that Maryland consumers are responding to an external stimulus." They feel that the incentives are too good to pass up, he said.

For the nation as a whole, sales of new vehicles were up slightly more than 17 percent during August. It was also the best selling month since October 2001.

$1,400 in incentives

According to J.D. Power & Associates, a Westlake Village, Calif.-based automotive research company, incentives on new cars and light trucks averaged $1,400 during August.

Walter McManus, J. D. Power's executive director of global forecasting, said if the manufacturers extend their incentives through the fourth quarter, the industry will post one of its best selling years ever.

Sales of used cars and trucks dropped 3.4 percent in Maryland during August, also down from a very strong August 2001, when sales reached a 10-year high.

Raymond C. Nichols, chairman and chief executive of Bel Air-based BSC America Inc., which operates used car auctions in Maryland and other parts of the country, attributed the drop to the incentives on new vehicles.

He said the big incentives have made the monthly payments on some new cars lower than on comparable 1- or 2-year-old used cars.

Basu noted that September U.S. vehicle sales were down slightly, due in part to a shortage of popular models in dealership showrooms.

"We would likely feel the impact in Maryland one month sooner," Basu said.

Double-digit gains

In August, the industry was led by the Big Three automakers, which all posted double-digit sales gains.

Chrysler dealers posted a 29 percent gain over sales in August 2001; General Motors sales were up 22 percent; and Ford posted a 12 percent increase.

Ford's F-Series pickup remained the best-selling vehicle in the country during August, and the Honda Accord was the best-selling car.

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