Fifteen of the area's largest auto dealers, their lots filled with unsold cars and their customers worried about recession and rising gasoline costs, have rented RFK Stadium this week to hold what they claim will be the biggest clearance sale ever held in the Washington area.
From tonight through Sunday, the dealers will attempt to dispose of more than 1,400 cars from 20 manufacturers. On hand will be representatives from credit unions and other financial institutions to finance purchases.
Even before Iraq's invasion of Kuwait, record-high inventories were piling up on dealers' parking lots here and elsewhere, a reflection of a softening economy. But that military action, coupled with the Bush administration's decision to ship thousands of American troops to the Middle East, sent consumer confidence skidding downhill, said industry analysts.
Car and truck sales for the first 10 days of August plummeted 18.4 percent below last year's levels.
"We've got a hell of a lot of inventory, a 110-day supply of 1990 cars," said John J. Pohanka, one of the dealers participating in the stadium sale. A 60- to 65-day supply of cars is considered "normal" in the U.S. auto industry.
Throughout the Washington area, "sales have not been brisk with this Iraqi situation," said Pohanka, president of Pohanka Oldsmobile/Honda/GMC in Temple Hills, Md. "We've got to move some inventory and that's all there is to it."
Still, some dealers are quick to see signs of a turnaround. Henry Gay Oldsmobile/Jeep-Eagle in Laurel sold eight cars yesterday after going through several days of selling nothing. Manager Richard Gay, whose dealership is not participating in the RFK sale, said it shows that the events in the Middle East so far have had little to do with the industry's plight.