Auto dealers indicated that sales have been strong in recent weeks. Nearly all the dealers surveyed for this report said sales in March and early April exceeded sales in the same period a year ago by significant amounts. Extensive manufacturers' incentives were said to be supporting the high rate of sales. Dealers indicated that these incentives, in the form of rebates and low-rate financing, were offsetting any effect that might have been expected from recent increases in consumer loan rates at financial institutions. Dealers' earlier concern about slow sales of new large sport utility vehicles has receded as sales of those vehicles have risen recently.
Dealers foresee some slowing in sales during the rest of the year.
They expect sales for all of this year to decline a few percent from last year's level. Finance Loan volume outstanding at Third District banks has edged up in recent weeks, mainly because of growth in business lending. On balance, banks in the District were boosting commercial and industrial lending. Bankers reported that business borrowers were implementing their expansion plans for the year, although a few bankers noted that some firms with plans to develop Internet ventures were delaying those initiatives and putting them under review. Consumer lending was generally sluggish, with most banks reporting flat to slightly declining loan volume outstanding in March and April.