European Stars And Stripes (Newspaper) - March 19, 1986, Darmstadt, Hesse                                Wednesday March 19, 1986 the stars and stripes Page 3 sinking Dollar pinches car sales in Europe indecisive buyers shy away from autos priced in foreign currency by Bob Hoye staff writer the depressed Dollar is Cooling off the red hot Mili tary car Market in Europe. Auto dealers and credit Union managers report an Overall decline in sales of 1986 models. The lower Dollar dealers say has made Many custom ers indecisive not knowing what kind of car to buy or if they should buy at All. Some buyers they Point out Are shifting away from cars priced in German Marks or other european Curren cies to american and foreign cars marketed in dollars. This has brought increased orders for . Cars sell ing at military Exchange outlets and increased interest in japanese and european cars priced in dollars. But the Overall volume of sales is Down from last year by As much As 25 percent in some areas. In 1985 americans in Europe spent an estimated $400 million to buy at least 40,000 new autos. A year ago there was standing room Only in our showroom said Frank Louden sales manager for automobile shopping Center Fuerth Nuernberg. People literally fought each other for cars in Stock. When i went Home at night i was so beat i could t talk. I was hoarse and had a sore Throat from talking non Stop All  uschi Galata Heinz car sales Wuerzburg says car sales have been cyclical in the 16 years she has been Selling to americans. But 1985 was something special. We did t have to sell. All we did was take orders Galata said. It got so crowded we had to lock the doors in the evening so we could process the orders taken during the  Hank Addison european manager of Andrews fed eral credit Union Frankfurt says that in 1985 custom ers bought cars they did t need because the High Dollar made prices so attractive. We actually had to fire some employees because they refused to work overtime to process car Loans Addison said. Our offices were swamped with loan applicants who were lined up Long after we closed the  the scene has changed dramatically. There definitely will be fewer cars sold this year maybe 20 to 25 percent less when All the figures Are in said de Alley owner of Carolina car co., Wiesbaden. What we re seeing is a shift and adaptation to the realities of the Market. The lower Dollar will Force buy ers to change to cars that Are priced in dollars. Many German dealers who came into the american Market when it was easy Selling with the High Dollar have already pulled  Don Sasseville vice president of european motors Frankfurt says the slumping Dollar is undermining sales of All cars priced in Marks. Things look really Tough for Mark priced cars unless the Dollar gets Back to the 2.60 or 2.70-Mark level Sasseville said. Sasseville compared the Dollar Cost of a 1985 Audi 5,000 at a 3.40 Exchange rate with a 1986 Audi 5,000 at a 2.20 Exchange rate. The 1985 Model Cost $12,200 at the 3.40 rate which was near the High on the Dollar last year. The 1986 Model with a 3,000-Mark increase Over the 1985 Model costs about $21,000 at the 2.20 rate. Galata in Wuerzburg said some customers really flip when they convert current Mark prices into dollars. Many dealers have audis and bows in Stock. In recognition of the Dollar s decline Bow has reduced prices on 1985 models an estimated 500 bows with . Specifications Are still in Stock. Mercedes Benz sales also Are lower. In 1985 service members bought 1,500 .-Model Mercedes. With the fall of the Dollar Many orders for 1986 models have been cancelled. The cheapest 1986 Mercedes available to the military buyer is the 190-d Selling at 50,500 Marks or nearly $22,000 at a 2.20 Exchange rate. While it s Tough going for German cars swedish vol Vos and Saab priced in dollars Are Selling better than in 1985. Priced briefly in Marks when the Dollar climbed above the three Mark level both Volvo and Saab reverted to Dollar prices when the Dollar retreated to the 2.90-Mark level. We be had customers waiting for delivery of German cars switch to swedish cars because it made economic sense to do so said Louden in Nuernberg. Jeff Scott marketing director for Saab military sales said sales for the 1986 Model year Are up about 15 percent. Arne Liberg director of military sales for Volvo says sales were up 24 percent for january and february compared to the first two months of 1985. Volvo has hiked prices 2 to 3 percent on its Export models. Saab prices have remained unchanged and Scott says there will be no increases for the rest of the year. With world demand for Volvo running ahead of production targets Liberg says there could be a shortage of Volvo for the military Market. " Scott expects Saab to meet increasing demands. Japanese cars priced in dollars also Are Selling Well on the military Market. We re expecting a Good year said Wayne Masden general manager of car world Kaiserslautern which markets .-specification Toyota to american buyers. Nissan deliveries Are up 31 percent from the pre Vious Model year said Bill Goldberg sales manager for overseas military sales group. And we re hoping for favourable response to our Dol Lar priced Peugeot and Jaguar programs which Are new this  confirmed sales of american cars at military Exchange programs lag orders by several months but sales personnel report a revived interest in . Cars. It takes time until people realize the consequences of the falling Dollar says Karl Gobhardt Ford Salesman at Rhein main a. Since the first of the year orders Are running 10 to 15 percent ahead of last  a Veteran of 35 years in the Exchange sales program Gebhardt has witnessed Many changes in the military Market. One change is the japanese car which did t exist when he sold his first Ford. In the past when the Dollar slumped most buyers shifted Back to american cars Gebhardt said. But now there Are other options. The japanese have acquired a Good portion of the american Market and their cars Are favourably  Gebhardt says there has been considerable interest in the Ford Taurus and Mercury Sable. Jack Legg chief of military sales for Chrysler am and vow of America says orders for 1986 Model cars Are about 20 percent ahead of last year. That s an average figure for the three companies All of which Are doing better than a year ago. Jim Bennett general motors representative in Frank Furt says orders Are up 22 percent for the Model year. We re doing a Good business in smaller cars such As Cavaliers celebrities and Che vettes to the lower ranked folks Bennett said. Julie Knight manager of the Navy Federal credit Union in Naples says More american cars Are being financed than in the past. The foreign car is still dominant in our Market but in the past month we be detected a  sales people and credit Union officials say the majority of cars sold at military Exchange outlets Are for state Side pickup. Most of the cars we re now financing Are for delivery in the ." said John Wooten overseas manager for Keesler Federal credit Union in Thetford England. Right now people heading Back to the . Are lean ing toward the american car said Donald Saito loan officer for Fairchild Federal credit Union in Vicenza Italy. Market for Auto Loans expanding diversifying by Bob Hoyer staff writer Over the past five years a steady Rise in car sales to american service members in Europe has created an almost insatiable demand for new credit. Loans come in a Host of options for the american Auto buyer in Europe. Interest rates Down payments and the duration of Loans vary widely. Competition among creditors is intense. It s a Market in constant transition. As new lenders arrive on the scene others tighten credit to make up for Money lost on bad Loans. As they have since 1968, Federal credit unions finance the vast majority of cars sold to military buyers in Europe. On the opposite Side of the Market car Sellers struggling to maintain High vol ume sales in the face of the falling Dollar push for expanding credit. As a result foreign and . Banks Many of them dealer connected Are enter ing the credit Arena. American express bid late last year for a bigger piece of the Auto credit Market by offering variable interest Loans at Mili tary banking facilities. The whole complexion of the credit Market could be changing Over the next few years says Gordon Simmons Over seas director of service Federal credit Union in Kaiserslautern. Credit unions Are More restricted than other financial institutions. We Are bound by Fields of membership and cannot solicit business outside of assigned areas. Financing by foreign Banks and Var ious dealer sponsored programs mean we Are going to have to work harder to meet the  de Alley owner of Carolina car co., Wiesbaden views the Market from the seller s perspective. I think increased Competition among the credit unions is Good for the Market Alley said. It has made the Market in Europe More like the Market available to the american buyer at Home. With Pentagon Federal credit Union adopting a More restrictive loan policy the need for credit in the european car Market will  Alley says several firms Are working on plans to finance their military sales. These programs should increase com petition among creditors and help the Market Alley Points out. Alley rates the availability of credit next to the Dollar Exchange rate As the most important reason for record foreign car sales to military buyers during the past two years. In Frankfurt Jack Legg director of Mili tary sales for Chrysler am and vow of America says financing is the crucial element in any successful sales program. Just this month general motors announced a loan package that includes 9.9 percent financing for overseas buyers. The plan is for stateside pickup of cars in Stock. We think it will help sales if Loans Are approved in a timely manner says Jim Bennett pm sales representative in Frank Furt. Ford also offers financing for . De liveries. But a company Salesman says his customers prefer credit Union financing because of delays experienced in process ing Ford Loans. While the increased availability of credit is expected to boost sales the rising prices on cars could have an opposite effect. Interest rates Are lower than they be been for years says Hank Addison european manager for Andrews Federal credit Union in Frankfurt. But the costs of cars have increased sharply. And this May offset the lower interest rates in the eyes of some  dealers say Many unsophisticated buy ers ignore the terms of Loans caring Only if they Are Able to afford payments. By contrast credit Union loan officers emphasize the diversity of financing available. Current credit Union interest rates on new cars Range from 8.9 to 13.9 percent depending on the size of Down payments and the payback periods of Loans. Dealers in the United states sometimes offer lower rates but Simmons Points out that these rates often apply Only for particular models that May include expensive options the customer does t want. Just three of the seven credit unions operating in Europe offer 100 percent financing. They Are Andrews in Germany Keesler in the United kingdom and Navy in the United kingdom Spain Italy the azores and Greece. Officials for the three say 100 percent financing is possible if the Money is Avail Able and if loan candidates Are adequately screened to prevent defaults. Credit Union officials estimate the cur rent european Stock of cars repossessed from service members who defaulted on Loans at 1,500."if the repossessions pile up you be got to take another look at your loan pro Gram one loan officer said. Credit Union lending policies Are under constant review. When they tighten credit in answer to a shortage of Money or excessive defaults on Loans other institutions step into the breach and Supply Money often at much higher interest rates. Credit unions came to Europe at the urging of Congress and the department of defense in 1968. Since then they have replaced local loan Sharks who were charging exorbitant interest rates in particular for the financing of cars