U.S. CAR SALES RECOVER FROM JANUARY BLAHS
Sales of U.S.-built new cars surged
during the last 10 days of March to the second highest levels
of 1987, indicating that car buying may have fully rebounded
from its January slump.
    Sales of imports, meanwhile, fell for the first time in
years, succumbing to price hikes by foreign carmakers.
    For the ten-day March 21-31 period, domestic automakers
sold 282,358 new cars, up 19.3 pct from late March 1986, giving
the industry an annualized sales rate of 8.1 mln cars. That
rate a year ago was 6.9 mln cars.
    "The last 10 days of March was the second strongest 10-day
period we've had this year," said David Healy at Drexel Burnham
Lambert.
    "We've had a slow recovery since January, and these latest
figures build on that. This lends some encouragement to the
idea that we're looking at a pretty strong year," he said.
    In early February sales were up briefly to 8.3 mln units on
an annual basis, before dropping again.
    Car buyers had rushed to dealer showrooms in December to
take advantage of expiring tax deductions, taking away from
normal January selling.
    But a slowly expanding economy, an exploding stock market
and a growing array of incentives have lured customers to
dealers' showrooms, analysts said.
   Ford Motor Co <F> sales jumped 29.5 pct in the period to
79,249 cars from 61,169 a year ago. For the month, the nation's
second largest carmaker said sales increased 17.8 pct to
197,328 compared to 167,490.
    Chrysler Corp <C> reported a 20.2 pct sales jump to 40,454
compared with 33,669. In all of March it sold 96,649, up 6.3
pct from 90,945.
    Industry giant General Motors's sales rose a more modest
6.2 pct for late March to 140,522 verses 132,298 last year. But
sales for the full month dropped 5.6 pct to 349,578 from
370,390.
    Also helping the U.S.-based industry, analysts said, is the
slackening demand for imports, which suffered the first sales
decline in memory.
    "Imports will need more and more sales incentives, a
phenomenon unheard of two years ago," said Scott Merlis at
Morgan Stanley. "Import prices have risen 17 pct on average, so
they've become more sensitive to weaker demand in general."
    General Motors market share for the period fell to 48.2
pct, below the 51 pct for the first three months of the year
and far below the 56 pct of most of last year.
    Ford's market share was 28.1 pct, up from 27.7 pct for the
first three months, while Chrysler's share was 14.3 pct, a rise
from 13.7 pct since the start of the year.
    Falling market share at General Motors apparently prompted
the company to decide this week to close six plants for a week
to bring supply into line with demand.
    But Ronald Glantz at Montgomery Securities said further
production cuts might be necessary.
    "While GM has just taken 100,00 units out of second quarter
production already because of weak sales, the continuation of
this weakening market share suggests another production cutback
is likely," Glantz said.
    Other carmakers with U.S plants posted these results during
the March 21 to 31 period -- American Motors Corp <AMC> 1,198,
down 50 pct, Volkswagen 2,145, down from 3,342, American Honda
16,635, up from 6,358, and Nissan 4,635, up from 2,536.
 Reuter
