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Sales of U.S.-Produced Vehicles to Fall Slightly in September

5 October 2000

Sales of U.S.-Produced Vehicles to Fall Slightly in September, NADA says, but Overall Light Vehicle Sales Increase; Another Record Year Expected for Overall Light Vehicle Sales

    WASHINGTON, Oct. 4 Overall vehicle sales enjoyed a slight
increase in September, while the "big-three" North American manufacturers
traded market share and experienced little overall gain.
    Overall sales of U.S.-produced light vehicles were lower in the September
data released by General Motors, but offset the gains in sales of Ford Motor
Co.'s and DaimlerChrysler's North American production.  "Stronger incentives
from DaimlerChrysler helped provide a double-digit monthly uptick for their
September sales," said Paul Taylor, chief economist for the National
Automobile Dealers Association.  "As news of a slowing world economy impacts
U.S. consumers, overall sales for the 'big three' automakers are likely to
moderate in the fourth quarter.  New product, and competitive incentives,
continue to be the keys to sales success this year."
    "The impact of six interest rate hikes over the last year is starting to
have an impact on light vehicle sales and production levels, but remains
consistent with the soft landing predicted for the economy," Taylor added.
The September sales figures also show that domestic vehicle manufacturers
continue to face a moderation of overall vehicle sales and a relative loss of
market share to import manufacturers.  "As a result, light vehicles are
expected sell at 17.3 million annual units in September, and at a pace very
near 17 million annual units during the fourth-quarter," said Taylor.  Despite
the slowing, Taylor forecasts the industry will set a new annual record
slightly above 17.3 million units, eclipsing the record set in 1999 of 16.9
million units.
    Ford sales increased by 3.4 percent overall, and Ford sold more Explorers
than in September 1999, suggesting that the Firestone tire recall has not
significantly affected Explorer sales.  The long-term trend is moderating non-
luxury SUV sales from the "big three" North American manufacturers.  "Ford
should benefit going forward when Explorer production returns to normal,"
Taylor said.
    Gasoline prices also have partially affected the long-term moderation in
sales.  "But, as gasoline prices move back toward $1.40, non-luxury SUV sales
from all of the 'big three' should benefit," said Taylor.  Sales of 4-cylinder
engine vehicles increased about five percent over 12 months after gasoline
prices rose by 30 percent in 1997, suggesting that some consumers have
responded to rising gasoline prices.