AMC Posts $70-Million Loss in Second Quarter

American Motors on Wednesday reported a $70.4-million loss for the second quarter, blaming the poor performance on low consumer demand for small cars.

The loss compared to a profit in the second quarter last year of $4.7 million. It was the second quarter in a row that AMC has reported a loss.

Revenue for the three months ended June 30 totaled $961 million, down 9.5% from the $1.1 billion reported in the period last year.

Jose J. Dedeurwaerder, AMC president and chief executive, attributed the poor performance to weak demand for subcompact cars.

But he said cost cutting and adjustment of production and dealer stocks would result in improved results in the second half of this year.

Some Skeptical

“Once our product range is broadened with the introduction of our two new intermediate-size cars in 1987 and 1988, we should be able to withstand shifts in the market,” Dedeurwaerder said.

Donald DeScenza, an automotive analyst with Nomura Securities in New York, disputed AMC’s contention that a shifting market caused the poor performance.

“Good small cars are selling very well. That part of the market isn’t weak at all,” DeScenza said.

He said sales of AMC’s Alliances were far below the year-ago period, while small cars made by the other U.S. auto makers and their foreign competitors remained high.

“I don’t think the car has a particularly good reputation, a high quality reputation. I think that’s the problem,” DeScenza said.

AMC, the fourth-ranked U.S.-based auto maker, is 46% owned by Renault, the French auto maker.