U.S. Auto Sales Drop for 3rd Straight Month

Despite a 20.8% increase by foreign makes, new-car sales fell 3.7% in July as the slump in sales of domestic models continued, the companies reported Monday.

Sales by domestic auto makers fell for the second consecutive month, down 11% from July, 1984. The seven companies that build cars in the United States said they sold 633,527 new cars last month, compared to 684,112 in July, 1984.

There were 26 selling days in July this year and 25 in 1984; percentage changes are calculated on a daily selling rate basis.

Auto analysts attributed the decline by domestic makes to increased competition from imports and the lack of sales incentive programs that all the companies had during the first half of the year.

Industry leader General Motors showed the biggest drop as its sales slid 15.9% in July. Chrysler, the only domestic auto maker to report an increase, said its sales were up 2.1% last month.

Analysts said a portion of GM’s continuing sales slump was due to a gap in its compact model lineup that occurred when the No. 1 auto maker stopped making its X-cars earlier this year.

“Ford, Chrysler and the imports have been penetrating the market segment in which GM has reduced its presence,” said Tom O’Grady, an industry analyst with Chase Econometrics.

Imports claimed 28.8% of the U.S. market, up slightly from the record share of 27.1% that they held in June.

Of the major import manufacturers, only Honda reported a decline in July sales, down 10.8% for the month. Toyota’s sales for the month were estimated, since the company did not issue its report.

Since Honda dealers carry little inventory, analysts said the company’s sales decline could be attributed to a strike by car haulers that has halted distribution to dealers since it began 11 days ago. “Any quirk in the distribution system can affect Honda sales,” O’Grady said.

In the last 10 days of July, sales of domestic cars were down by 10.5%, indicating that the effects of the strike were beginning to be felt. The U.S. companies sold 242,781 cars in late July, compared to 271,260 in the same period last year.

Joseph Phillippi, automotive analyst with the New York brokerage house E. F. Hutton, estimated that half the decline in late July was caused by the strike.

During the strike, “the numbers are going to be somewhat artificially depressed,” Phillippi said.

Auto Sales Percentage changes in auto sales for the month of July are based on daily rates rather than total sales volume. There were 26 selling days in the 1985 period and 25 selling days in the year-ago period.

July 1985 1984 % change GM 348,936 398,858 -15.9 Ford 165,621 162,568 -2.0 Chrysler 87,766 82,691 +2.1 AMC * 12,144 23,783 -50.9 VW U.S. 6,198 6,608 -9.5 Honda U.S. 9,338 9,624 -6.8 Nissan U.S. * -- -- -- DOMESTIC 633,527 684,112 -11.0 Toyota 60,000 51,962 +11.0 Nissan 53,564 42,183 +22.1 Honda 28,062 30,255 -10.8 Mazda 17,229 16,269 +1.8 Subaru 15,569 15,097 -0.7 Volvo 10,835 10,123 +3.2 VW Imports 13,079 7,924 +58.7 Others * 58,162 30,369 +84.0 IMPORTS 256,500 204,182 +20.8 TOTAL U.S. 890,026 888,294 -3.7

*Estimate