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Incentives, Tax Changes Boost Domestic Sales Little; Imports Up

December 4, 1986

DETROIT (AP) _ Limited sales incentives and 1987 tax changes weren’t enough to significantly boost November domestic car sales, which rose only 5.2 percent from a year ago while import sales jumped 10.1 percent.

Combined car and light-duty truck sales fell 0.6 percent for domestic makers in November compared with a year ago and rose 16 percent for foreign makers, according to figures reported by the companies Wednesday.

Foreign makers continued their strong hold on the U.S. market in November with 33.4 percent of car sales and 24.1 percent of light-duty truck sales.

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.

Import truck sales, not covered by voluntary import restraints, rose 41.6 over November 1985. The seven makers of foreign light-duty trucks sold in the United States all are Japanese corporations.

The eight U.S. automakers’ car sales rose only 5.1 percent from Nov. 21-30 over the year-ago period while their sales of light-duty trucks fell 11.4 percent.

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.

In August, faced with mounting inventories of many of its models, GM launched a wholesale, widespread deep-discount financing war. The incentives spurred sales but cost the companies, especially GM.

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 bestseller, 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 import sales increasing 23.7 percent in November over a year ago. Toyota Motor Corp.’s 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 and said the changes in tax laws for 1987 didn’t seem to be prompting sales either.

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

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