At Car Dealers Small Is All

Slumping sales hit big cars

Few industries have been so immediately and painfully dented by the oil crunch as U.S. automaking. Mainly because of scarce gas and exploding prices, car sales have skidded from an annual rate of about 12 million units in March to roughly 10 million today, a drop of 26% from last year's record mid-June pace. A main contributor to the slump is buyers' snubbing of luxury and even standard models, while the demand for fuel-thrifty small cars is far outstripping Detroit's ability to produce them. Buyers are increasingly turning to Toyotas, Volkswagens and other economically operated foreign makes, which now account for nearly a quarter of the U.S. market.

Just as in the panicky period that followed the Arab oil embargo in 1973, the major auto firms were caught off guard by the sudden buyer switch to smaller cars. Of General Motors' new X car line, President Elliot Estes notes: "We guessed in favor of the six-cylinder engines. But right now sales are running 60 to 40 in favor of the fours." GM is getting no help from its big cars either. Sales of the standard Chevrolet are off 20% since January; Buick Le Sabres are limping almost 29% behind 1978's pace, and purchases of the Oldsmobile 98 are down 19%.

Ford Motor Co. too is feeling the pinch, with sales of its big Thunderbirds down 41% for the year so far, and purchases of Mark Vs off 24%. But the plunge-of-the-year award so far goes to the Cougar, which had sold 18,775 by mid-June in 1978. For the same period this year, fewer than 3,000 Cougars have been bought--only 35 of them during the middle ten days of June. At Chrysler, sales of Dodge Aspens are down 30% for the year. The company's hottest autos are the subcompact Dodge Omni and Plymouth Horizon (up 55%). Yet production of these models is limited because their engines are supplied by Volkswagen, and the number is fixed at 300,000 for the year.

Though GM Chairman Thomas A. Murphy maintains that the automakers will sell 11.5 million cars this year, other industry officials say they would not be surprised by sales of 10.5 million.

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