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Incentives, Tax Changes Boost Domestic Sales Little; Imports Up

December 4, 1986

DETROIT (AP) _ Domestic automakers continued paying back for wholesale incentives offered from August through October as car sales rose only slightly in November from a year ago while imports jumped sharply.

Domestic makers’ sales rose only 5.1 percent in late November and 5.2 percent for the month compared with the year-ago periods.

But imported car sales rose 10.1 percent in November from a year ago and accounted for 33.4 percent of the U.S. market.

Sales of light-duty trucks dropped 11.1 percent in November from a year ago for domestic makers but rose 41.6 percent for foreign makers, who held 24.1 percent of the U.S. light-duty truck market.

Light-duty trucks, including sport-utility vehicles, pickups and vans, account for approximately a third of all domestic vehicle sales and have become increasingly important to both U.S. and foreign makers.

Combined car and truck sales fell 0.6 percent for domestic makers in November compared with a year ago and rose 16 percent for foreign makers.

The biggest loser was industry leader General Motors Corp., whose domestic car market share fell from 56.4 percent in late November 1985 to 43.9 percent in the period this year.

″GM’s market share is incredibly poor,″ said industry analyst Ron Glantz at Montgomery Securities in San Francisco. ″October’s was the lowest GM market share in 21 months and this is even worse.″

GM’s car sales were down 18.2 percent and 9.4 percent for the month from the year-ago periods.

GM on Wednesday announced it would cut production at three luxury car plants early next year and lay off 4,500 workers indefinitely to combat poor sales while avoiding widespread financing incentives.

Ford Motor Co.’s car sales, boosted by the strong performance of its popular Taurus and Sable models, rose 26.7 percent in late November and 23.8 percent for November as a whole from the year-ago periods.

″Taurus really hasn’t lost its luster,″ said analyst Joseph Phillippi with E.F. Hutton in New York. Among Ford division cars, Taurus consistently has outsold Escort, Ford’s previous best-seller, in recent sales periods.

Ford’s market share in late November rose to 28.7 from 23.8 percent a year ago and Chrysler’s rose slightly to 13.6 percent from 13.2 percent a year ago.

Chrysler’s sales also were up, increasing 8.6 percent in late November and 9.3 percent for the month from a year ago. American Honda Motor Co.’s sales were up 341.8 percent, reflecting increased U.S. production.

American Motors Corp.’s U.S.-made car sales continued to plummet, falling 41.2 percent in late November and 48.1 percent for the month compared with the year-ago periods.

Honda also was a big winner with its foreign-made cars, whose sales increasd 23.7 percent in November over a year ago, as was Toyota Motor Corp., whose import sales jumped 27.9 percent.

Nissan Motor Corp.‘s imports fell 23.3 percent in November from a year ago and Mazda Motor Corp.’s imports were down 17.2 percent.

Chrysler, Ford, AMC and GM’s Chevrolet division offered limited sales incentives during part of November, but analysts discounted the lures’ effects and said the changes in tax laws for 1987 did not seem to prompting sales either.

″We’re still paying back that August-to-October year-end clearance sale,″ Phillippi said.

Only Chrysler’s car sales were up for the year so far, rising 1.8 percent over a year ago. GM’s sales were down 1.7 percent for the year and Ford’s were down 3.1 percent.

Honda’s and Nissan’s sales of U.S.-made cars were up 53.9 percent and 30.3 percent, respectively, for the year over a year ago.

The eight domestic automakers sold 169,635 cars in the seven selling days from Nov. 21-30 and 521,074 in 24 selling days during the month, compared with 184,506 in eight days and 515,802 in 25 days a year ago.

Foreign makers sold 261,023 cars in November compared with 245,858 a year ago.

Domestic makers sold 81,474 trucks in late November and 241,998 during the month compared with 105,149 and 283,575 a year ago. Foreign makers sold 76,723 trucks in November compared with 56,447 a year ago.

For the year, domestic makers have sold 7,541,593 cars and 3,355,323 light- duty trucks in 281 business days compared with 7,646,718 cars and 3,337,236 trucks in 282 selling days last year.

Foreign makers have sold 2,909,566 cars and 835,662 trucks compared with 2,573,910 cars and 705,680 trucks a year ago.

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