Auto Sales Soar As Americans Abandon Their Aging Clunkers With PM-Auto Sales-Table
DETROIT (AP) _ Throughout the recession, the average car cruising America’s highways grew steadily older. Many people wanted to trade in their clunkers, but fears of unemployment and higher car prices kept them away from dealerships
They crossed their fingers, hoping to avoid expensive repairs.
Now, unable to wait any longer and facing the specter of higher taxes, many Americans are finally taking the plunge, and the long-suffering auto industry is reaping the benefits.
Mid-May sales of new cars and trucks jumped 18.3 percent over a strong period last year, producing the best sales rate since late January, automakers reported Tuesday.
″There are two things going on,″ said Wertheim Schroder & Co. analyst John Casesa. ″The stock of cars on American roads is just too old. And lower interest rates have made car financing extremely attractive, for leasing or buying.″
Auto dealers report brisk activity in showrooms, evidence that long pent-up demand is finally being released. Dealers also say the quality of trade-ins is low.
″We’re seeing some true beaters in as trades,″ said Rick Balazs, sales manager of Lehighton Lincoln-Mercury in Lehighton, Pa.
According to R.L. Polk, a firm that tracks auto registrations, one of every four vehicles on the road is at least 12 years old.
The Big Three and Japanese companies that build cars and trucks in the United States all shared in the strong May 11-20 sales.
On an annualized basis, cars sold at a rate of 7.4 million, the best since a 7.6 million rate in late January. Trucks sold at an annualized rate of 5.1 million.
Including imports, the annualized rate for vehicle sales was 14.4 million, well above the 13.7 million sales predicted for the year by several auto executives.
General Motors Corp. reported higher car sales for a fifth consecutive period with a 7.7 percent increase. Its light truck sales, including pickups, minivans and sport utilities, were up 14.2 percent for a combined gain of 10 percent.
Ford Motor Co. said its combined car and truck sales were up 16.1 percent. Most of the increase came from brisk sales of light trucks such as pickups, minivans and sport utilities. Ford car sales in the May 11-20 period were up 6 percent and truck sales soared 28.1 percent.
According to estimates by the trade journal Ward’s Automotive Reports, Chrysler Corp. car sales rose 50.8 percent and light truck sales rose 22.8 percent. Chrysler reports its sales figures monthly.
Uncertainty over the timing and scope of new federal taxes proposed by President Clinton has affected business in many parts of the economy.
But autos sales have picked up in recent months, baffling economists and analysts worried that falling consumer confidence and sticker shock among those who haven’t shopped for a new car in several years will bring a retrenchment.
″They’re going to have to (buy),″ said Bobby Wyatt, sales manager at Brandon Toyota in Clarksville, Tenn. ″What’s going to happen with the Clinton administration is going to happen, they can’t change that.″