‘97 Auto Sales Keep Pace With Robust 1996 Levels Light Trucks Gain Popularity While Car Sales Keep Sliding

Domestic auto manufacturers may not want 1997 to end, according to industry analysts. Analysts expect domestic auto sales to reach a pace of 13.27 million annualized units in December, on par with 1996 sales levels. While light trucks continue to gain market share and consumer acceptance, car sales continued their downward slope at the end of the year.

Worldwide auto sales should reach a pace of 15.4 million units, according to David Healy of Burnham Securities. “It looks as if full-year 1997 unit sales will come in unchanged or marginally lower than 1996,” Healy said.

The robust sales pace for the year can be accredited to positive economic fundamentals, according to James Padinah of Briefing.com. “A whole host of factors - fast income growth, sky-high confidence, increased wealth feelings associated with the stock market increase, an extremely low unemployment rate, favorable new car prices, kind short-term interest rates and generous incentives - have supported sales all year,” Padinah said.

The light truck market will still lead the pack in growth, according to Diane Swonk with First Chicago-NBD. “Light trucks will likely comprise over 45 percent of (total worldwide) sales in 1997, up significantly from a mere 30 percent 10 years ago,” Swonk said.

Experts agree that credit for continued light truck sales growth should go to the addition of new products within the past year. Incentives have also continued to prop light truck sales throughout the latter part of 1997.

While sales figures may have most automakers celebrating the end of ‘97, market share could be a spot of blight for some. Burnham’s Healy expects GM to lose ground in the market share war in ‘97 vs. ‘96. “We estimate that GM’s share of total industry sales in December 1997 was 30.6 percent against 29.6 percent a year earlier, but that its full year share was 30.6 percent vs. 30.7 percent in 1996,” he said.

Chrysler is also singing the blues in the market share battle. Because of supplier problems, Chrysler was without two key products for part of the third quarter of ‘97: the Dodge Intrepid and Chrysler Concorde sedans.