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STRICTLY CONFIDENTIAL May 29, 1951 PASSENGER CAR SALES ASP STOCKS Dealers 1 sales of new passenger oars i n April and May declined below the high year-ago l e v e l s , aocording to the s e c r e t reports from the automobile companies. These r e p o r t s , now available through ilay 20 for major companies, a l s o i n d i c a t e t h a t t h e i r d e a l e r s 1 s a l e s of used cars continued to r i s e somewhat and in e a r l y May were s l i g h t l y above the year-ago level* Reported stocks of new cars have continued to increase moderately, while stocks of used cars held by these dealers have declined. Stocks of both new and used cars are considerably above l a s t year*s low l e v e l but do not appear t o be high r e l a t i v e to more normal periods« Hew oars Dealers reported sales of about ij.50,000 new passenger cars in A p r i l , as shown in the following c h a r t . This f i g u r e , exclusive of 25 to JO thousand u n i t s produced for export and for sale to the Federal Government, was about 15 per cent smaller than in March and 9 per cent smaller than a year ago* For some models, decreases in sales r e f l e c t e d curtailments in output required by Federal order, while for other models output continued above the r a t e of s a l e s . Although both t o t a l s a l e s and t o t a l output declined by about the same amount from March t o April, since output in March was l a r g e r than sales t o t a l dealers stocks rose further in April by n e a r l y the same amount as in March. By pre-World War I I standards, however, stocks of leading makes were s t i l l low in STRICTLY CONFIDENTIAL STRICTLY CONFIDENTIAL NEW CARS-DEALERS' SALES AND STOCKS THOUSANDS 700 - STOCKS SALES THOUSANDS 700 END OF MONTH ^ \ 600 -1951 500* 400 / i 600 \ \ 1950 \i\ f _\ r / _/ 500 A Vv 1949 i 400 \ 300 V 300^ 200 200 - 1950 V 100 100 i J FMAMJ 0 i JASOND I I j L JFMAMJ I I JASOND - 2 relation to sales. Stocks of a few makes, however, were quite large* Also, there was a very marked shift in the situation as compared with a year earlier — stocks were more than twice as large as at that time, while sales were smaller•• Estimates for May, based on partial data for the first 20 days, show some further divergence in sales and stocks. If, however, the presently scheduled reductions in passenger car output are carried out in June and July, the rise in stocks would be arrested if sales are maintained at present levels* As was mentioned in an earlier statement on this subject, dealers may still be reporting to manufacturers part of their stocks of new cars as having been sold in order to establish a claim to larger allotments of shipments of new cars in future months. Any continuing widespread resort to the practice of understating stocks and overstating sales would indicate that dealers were generally anticipating a more active demand situation in coming months. Even if actual stock figures were 20 per cent larger than the reported level, the volume of stocks would still not be particularly excessive for this season of the year* New car registration: data for selected cities provided by the R*L* Polk and Co., supplemented by registration reports supplied by the Reserve Banks, continue to be roughly consistent with the level of sales reported by all dealers to the automobile manufacturers* This can be seen by comparing the left panel of the preoeding chart with the right panel of the chart on new passenger cars shown in the main section of this report* STRICTLY CONFIDENTIAL - 3 Used cars Sales of used cars by new car dealers have continued a t the r e l a t i v e l y high year-ago l e v e l s as shown in the following chart. Stocks of used cars held by new car dealers have shown somewhat more decline in April and Hay than during the corresponding period l a s t year probably r e f l e c t i n g a reduced number of t r a d e - i n s as new car sales declined and fewer d i r e c t purchases by dealers of used cars as prices turned down» Stocks a t the end of May w i l l probably be about 125*000 u n i t s larger than a year e a r l i e r ^ This level i s equivalent to l e s s than a month's s a l e s »- about the same as t h a t p r e v a i l i n g in 1959 sind 19^0, according to the s t a t i s t i c s available from two of the major companies• Presumably used car stocks held by new car dealers in other recent years were below prewar r e l a t i o n s h i p s t o sales* In addition i t may be noted t h a t the current l e v e l s of both sales and stocks of used cars reported by new car dealers are apparently considerably lovrer r e l a t i v e to the r a t e of new car sales than in the prewar period* According to conversations with an o f f i c i a l of one major company, t h i s difference in r e l a t i o n s h i p r e f l e c t s mainly the large number of used cars s t i l l being sold d i r e c t l y by individuals because of the continued postwar opportunities for new car dealers to r e a l i z e gains rather than losses from t h e i r trade-ins# STRICTLY CONFIDENTIAL STRICTLY CONFIDENTIAL USED CARS - DEALERS9 SALES AND STOCKS SALES STOCKS THOUSANDS 700 THOUSANDS 700 END OF MONTH 600 600 500 400 300 £00 200 100 100 J JFMAMJJASOND L J I J I JFMAMJJASOND
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