New car sales rose in the aftermath of the Oct. 19 stock market collapse, giving a preliminary indication that consumer confidence may have escaped with minor injuries, analysts said yesterday.
"If we are going to see consumer cutbacks, we'd see them in autos first," said Jerry J. Jasinowski, chief economist of the National Association of Manufacturers, which represents 13,500 manufacturing companies. Jasinowski said an NAM postcrash survey of business, also announced yesterday, showed similar confidence at the corporate level.
"For the moment, both consumers and business people seem intent on pressing forward with precrash spending plans," Jasinowski said.
The nation's Big Three auto makers reported an 11.2 percent sales increase in domestically produced vehicles between Oct. 21-31, to 318,133 units, compared with the same period a year ago.
Some auto industry analysts, using broader measures, said the increase was smaller -- up 10.4 percent, with 323,722 U.S. cars and trucks sold at the end of October, compared with 293,113 sold in the year-ago period.
But what matters is that vehicle sales were up when they quite easily could have been down -- way down -- after Oct. 19, when the stock market plunged 508 points, analysts said.
Cars and trucks are durable goods -- big-ticket items that usually are among the first things crossed off personal shopping lists when the economy seems headed for trouble. In the last two weeks, the stock market's erratic behavior raised concerns that the U.S. economy was hitting the skids.
While emphasizing that one 10-day vehicle sales report does not indicate a trend, "these numbers seem to reinforce the view that the economy has underlying strength," said Jasinowski.
"Business people are not overly pessimistic," he added, basing his views on NAM's survey. "Very few companies, at this point, are taking actions to cut back spending in operations or to reduce capital spending."
However, some auto industry analysts believe that many potential new-car buyers were traumatized by the crash, and that future 10-day vehicle sales figures will give a more accurate measure of their dismay.
Total vehicle sales, including imports, are due for a fall anyway, said Susan G. Jacobs, manager of automotive research at Merrill Lynch Economics Inc. in New York. Annual vehicle sales have totaled 15 million units or more since 1985, and are not likely to continue at those record rates much longer, Jacobs said.
The U.S. auto market is soft and saturated; prospective new-car buyers tend to wait for sales incentives, which sometimes don't work.
"The stock market crash of Oct. 19 is expected to reinforce the deterioration in vehicle sales, as the jarring effect on consumer confidence translates into scalebacks in easily postponable, big-ticket purchases," Jacobs said.
Merrill Lynch, as a result, is revising its 1987 new-car sales forecast downward to 6.9 million units from its original projection of 7.2 million. Domestic auto makers will suffer most of that, Jacobs said.
But Washington area car dealers were more optimistic. An informal Washington Post survey of 12 dealerships in Virginia and Maryland yielded reports of business as usual, especially at dealerships selling expensive cars such as BMW and Mercedes-Benz.
"I'd be very happy to have the last two weeks every two weeks of the year," said Gary Freedman, sales manager at VOB BMW in Rockville.
"Our sales have been up for the last two weeks," said Freedman, declining to give specific numbers.
Not many customers who came into the Rockville showroom spoke about the stock market, Freedman said. "And we didn't do any interviews to find out why they wanted to buy one of our cars at this time, either," he said.
"I mean, we're not going to sit down with a guy who's about to buy a $50,000 car and ask him what he feels about the money he lost in the stock market. That's not the way to do business."