Domestic auto sales, running on yet another mixture of cut-rate financing and rebates, picked up speed in the first 10 days of August.
But the gain of 11.2 percent over the year-ago period was a lackluster performance and an indication that the often-used sales gimmicks are losing pulling power, some auto industry analysts said.
Domestic auto makers, including foreign-owned companies producing in the United States, sold 169,124 cars between Aug. 1 and 10, compared with 152,029 sold in the 1986 period.
On an annualized basis, that works out to 8.4 million cars versus 7.6 million last year.
Cause for celebration?
"Not really," said L. Raymond Windecker, chief auto industry analyst for Ford Motor Co.
"You're going to hear a lot of people talking about 'sales boosted by sales incentives,' but at the end of the year you're going to see that that really didn't mean much," Windecker said.
The sales trend for the first seven months of 1987 indicates domestic car producers will sell 7.2 million cars by the end of the year, a 12.2 percent drop from the 8.2 million sold in all of 1986, Windecker said.
"That is not likely to change," even with the recent 1.9 percent financing programs now offered by Ford, General Motors Corp. and Chrysler Corp., Windecker said.
Auto sales last year were boosted by an unusual combination of then-stunning 2.9 percent financing rates and impending federal tax law changes that pulled many buyers out of the 1987 market into the market for 1986 cars, according to Windecker and other analysts.
Windecker said car buyers seem to be getting tired of the incentives game.
David Healy, an auto industry analyst with Drexel Burnham Lambert Inc. in New York, agreed. "It looks as though the incentive programs are losing their effect," he said.
For example, last year's 2.9 percent financing rates raised auto sales "as high as 65 percent" over the 1985 period in late August and early September, Healy said.
"We don't seem to be getting that kind of reaction this time around," he said.
Still, the current incentives appear to be giving some needed help to inventory-bloated GM, which sold 91,582 cars from Aug. 1-10, a 16.9 percent increase over the 78,355 sold in the year-ago period.
GM, which has in excess of a 100-day supply of cars in several of its model lines, initiated the latest incentives' shootout on Aug. 5.
A 60-day supply of cars is considered normal in the domestic car industry.
Ford followed GM with a 1.9 percent financing offer, mostly to hold on to buyers who shop for price instead of product.
Otherwise, Ford was doing reasonably well without incentives, as reflected in its 19.2 percent sales gain in the Aug. 1-10 period -- 49,402 cars sold versus 41,435 a year ago.
Chrysler, which last week completed its acquisition of American Motors Corp., was the last to go with the new 1.9 percent financing rate.
Chrysler appears to have lost buyers as a result "because people were waiting to see what we would do" to respond to the Ford and GM programs, said Chrysler spokesman B.F. Mullins.
Including those sales transferred from AMC, Chrysler sold 17,568 in the 10-day period, a 34.1 percent drop from the 26,674 (AMC/Chrysler combined totals) sold in the same period last year.
AMC's slower-selling cars, coupled with the suspended production of Chrysler's popular Omni/Horizon subcompact models, also affected Chrysler's latest sales performance, some analysts said.
Omni/Horizon production is expected to resume this year at the former AMC car plant in Kenosha, Wis.