"U.S. motor vehicle manufacturers, faced with recession-level sales for the past three years, are poised for a comeback during 1982." -- Motor Vehicle Manufacturers Association
U.S. automakers will have to wait another year for a recovery: They already have written 1982 off as a disaster.
In recognition of that fact, domestic manufacturers are cutting fourth-quarter production schedules in an attempt to reduce bloated inventories and to lower further the number of vehicles they must sell to break even. Industry analysts say the cuts will reduce 1982 domestic car production and sales to a maximum of 5.3 million units. That would be the worst performance since 1958, when U.S. automakers produced and sold 4.2 million cars.
Last year domestic manufacturers moved 6.2 million cars out of factories and into consumers' hands -- still a dismal performance compared with the 8.4 million units produced and sold in 1979, or with the estimated 9.2 million cars that rolled off the assembly lines both in 1978 and 1979.
"This year definitely is not the year of recovery" predicted by many analysts and manufacturers, said Arvid Jouppi, an auto-industry analyst in the Detroit office of Colin Hochstin Co. He said the recovery probably will come some time next year.
Reminded that he and other analysts expressed similar optimism last year, Jouppi said: "I know we said the same thing in 1981 about good prospects in '82. I got egg on my face, and I'm just beginning to get it off."
Analysts interviewed yesterday said erratic pricing -- in which manufacturers raised prices several hundred dollars only to give the money back to consumers in the form of rebates -- and the persistent recession, with its high unemployment, helped deepen the pit in which U.S. automakers now find themselves.
Next year will be different, or could be different, largely because of reduced interest rates, lower car prices and the increasing value of used cars that could be used as trade-ins on new-car purchases, the analysts said.
"A lot of ingredients for a recovery in car sales are being put into place," said David Healy, an analyst at New York-based Drexel Burnham Lambert Inc. "But whether the recovery starts with the opening bell Jan. 3 the first business day after the New Year's holiday is another matter."
Despite reduced production and sales rates, Healy said he believes General Motors Corp., the nation's largest automaker, and Chrysler Corp., the third-largest, could break even or finish in the black.