New-car sales up 8.75% in Md. May is strongest month nationwide in nearly a decade


After eight consecutive months of decline, new-car sales in Maryland rose in May by 8.75 percent, the Motor Vehicle Administration reported yesterday.

Nationwide, May was the strongest month for car sales in nearly a decade, said David B. Healy, an analyst at Burnham Securities. New-car sales reached 793,000 last month, 7 percent more than in the same period last year.

Healy said many automakers cut prices and offered rebates this spring, encouraging people to buy then instead of waiting.

"I think we'll see a backswing in July and August," he said. "We may have weak car sales in the third quarter."

Car sales are regarded as an important gauge of how the economy is faring and how consumers feel about their financial situations.

"It's more of a mirror than a barometer," Healy said. "Car sales show how we feel about our jobs and our level of consumer confidence right now, but it doesn't predict the future."

According to state title registrations, 32,268 new cars were purchased in last month's 20 days of selling, up from 29,672 in May last year, when there were 21 selling days. Used-car sales remained virtually unchanged at 48,514.

The average price of a new car was $20,800, up about 3 percent. XTC Used cars sold for an average of $6,500.

Robert Rusel, president of R & H Motor Cars Ltd. in Owings Mills and chairman of the Maryland New Car and Truck Dealers Association, said last month seemed little different from its predecessors

"In truth, from a car dealer's perspective, business has been pretty good," he said. "Luxury cars are doing very well. A lot of people are making a fair amount of money in the stock market, and they want to spend it."

For example, national sales of Lexus rose 100 percent last month, he said, while Toyota had its best May in history with an 11.8 percent increase.

Mercedes-Benz was up 67 percent, he said, and Volkswagen, 44 percent. Nissan's sales dropped 10 percent.

Bernie Church, general sales manager of Lexus of Annapolis, said he can't keep up with demand.

"If you're selling anything right now -- jewelry, clothing, real estate -- it should be high line. Right now, baby boomers are in their peak earning years," he said. "I don't anticipate business softening up anytime soon."

Pub Date: 6/27/98

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