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Sales of U.S.-Produced Vehicles to Fall in August

1 September 2000

Sales of U.S.-Produced Vehicles to Fall in August, NADA Predicts Overall New Orders Decline in U.S. as Consumers Tighten Purse Strings

    WASHINGTON, Aug. 31 Overall vehicle sales will remain
steady, but sales of  U.S.-produced light vehicles likely will be lower when
August data is released on Friday, Sept. 1, said Paul Taylor, chief economist
for the National Automobile Dealers Association.
    "The 7.5 percent decrease in July of new orders for manufactured goods
signals that suppliers in nearly all industries are taking a breather as the
economy slows under the weight of six interest rate hikes by the Federal
Reserve," said Taylor.  Unfilled orders and shipments fell at a much slower
rate than orders during the third-quarter, indicating that inventories are
being rebuilt for popular items, even as overall orders moderate.  "That will
contribute to future price stability -- evidence that the 'soft-landing' has
been successful," Taylor said.  All three North American auto manufacturers
have reduced their third-quarter vehicle build schedules, with Ford sighting
the Firestone tire recall as a contributing factor.
    The August sales figures should also show that domestic vehicle
manufacturers are facing a moderation of overall vehicle sales and a relative
loss of market share to import manufacturers.  "As a result, light vehicles
will likely sell at an average pace below 17 million annual units during the
fourth-quarter," said Taylor.  Despite the slowing, Taylor forecasts the
industry will set a new annual record of well above 17 million units,
eclipsing the record set in 1999 of 16.9 million units.