
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, March 4, 1995                   TAG: 9503060057
SECTION: BUSINESS                    PAGE: A8   EDITION: METRO 
SOURCE: KNIGHT-RIDDER/TRIBUNE
DATELINE:                                 LENGTH: Medium

CAR SALES LOPPED OFF BY INTEREST RATES

Sales of new cars and trucks may be leveling off more quickly than even the most conservative estimates, with February's results again suggesting the steam may be going out of the industry's growth.

February sales fell 4.1 percent overall compared with a very strong February 1994. Car sales were down 7 percent. Light truck sales - minivans, sport-utility vehicles and pickups - rose 0.4 percent.

``The big gains are behind us for this cycle,'' said S.G. Warburg analyst David Healy.

Ford said sales were up 3.6 percent - making it the only Big Three automaker to report an increase. Light-truck sales rose 11.5 percent, but car sales were off 3.4 percent.

Nissan said its combined car and truck sales were off 6.3 percent.

Rising interest rates appear to be taking a bite out of sales. And manufacturers are responding with more and bigger rebates to offset the increase in monthly payments created by higher financing costs.

Friday, Chrysler increased rebates to $1,000 across the board on its midsize sedans - Chrysler Concorde, Dodge Intrepid and Eagle Vision - with an additional $500 rebate on models with 3.5-liter engines. Chrysler said Thursday that because of slack sales it was closing for the second week in a row its Bramalea, Ontario, plant where those cars are made.

Earlier this week, Ford raised its rebate offer on the Windstar to as much as $1,750 to lure customers from Chrysler before its redesigned minivans go on sale in April.

The rebates apparently helped Ford: Windstar had its best sales in February since it was introduced a year ago. Still, a 90-day inventory at the end of January and slow dealer orders prompted Ford to close its Oakville, Ontario, plant next week, the third week of down time there this year.

by CNB