A golf buddy of mine is the GM of a dealership... his sales were off 60% from last year in Sept....
Tight credit, financial chaos slam auto sales By TOM KRISHER and BREE FOWLER, AP Auto Writers
Tight credit, economic worries and high gasoline prices combined to crush the sales of U.S. and foreign automakers alike last month, with beleaguered Ford Motor Co. reporting a 34 percent decline and Toyota Motor Corp. posting a 32 percent drop.
It was Ford's worst sales month this year, and the results across the industry are a strong indication that the financial turmoil that has swelled since mid-September is pushing the auto industry deeper into its trough.
General Motors Corp., buoyed by its offer of employee pricing on most of its vehicles, saw U.S. sales drop a less severe 16 percent, boosting the automaker's market share to its best level all year.
Hyundai Motor Co., whose single-digit sales decline this year has looked like a success against the Detroit automakers' slide, reported Wednesday that its U.S. sales fell 25 percent. Honda Motor Co., one of the few automakers that had posted sales growth through August, reported a 24 percent drop.
George Pipas, Ford's top sales analyst, said nearly all automakers saw "extremely weak" sales in the waning days of the month as the Wall Street crisis grew and Congress debated the government's $700 billion bailout of the financial industry.
"It was tantamount, really, to a natural disaster," he said.
Mark LaNeve, GM's vice president of North American sales, said the automaker grew its market share to more than 28 percent in September because it experienced smaller sales drops than its competitors.
The share did not come with the expense of incentives, which he said averaged only $100 per vehicle more than in August and were flat from July to August despite the monthlong employee pricing offer, LaNeve said.
Incentive spending was reduced, he said, because GM did almost no leasing during the month.
But even though it may have gained market share, LaNeve said the numbers were still down year-over-year.
"A few years ago I'd have jumped out the window with these numbers, and we're on the 39th floor here," he said in a conference call from GM's downtown Detroit headquarters.
If overall U.S. industry sales drop in September, it will be the 11th straight monthly decline when compared with the year-ago period. That would be the longest string of down months since 14 straight negative months ended in December 1991, according to Autodata Corp.
Dealers from many manufacturers have said their customers are having an increasingly hard time qualifying for loans to buy autos, as banks have restricted lending because of widespread mortgage defaults that led to disruptions in the financial markets and the collapse of several banks. Plus, several automakers' finance arms have limited or discontinued leasing.
Jim Farley, Ford's group vice president for marketing, said economic conditions have raised uncertainty among buyers.
"Even if you have good credit, there's a reluctance to pull the trigger on a big ticket item," he said.
Ford sales also were hurt as buyers continued to favor small fuel-efficient cars over trucks and sport utility vehicles. Truck sales were down 39 percent, while car sales dropped 19 percent. The numbers do not include Ford's Volvo Cars unit.
There were few bright spots in Ford-Lincoln-Mercury model lineup last month, with sales of all but three models far lower than the same month a year ago. Sales increased only on the Focus small car, up 5 percent; the Crown Victoria large sedan, up 3 percent; and the Lincoln Town Car, up 69 percent.
Sales of F-series pickup trucks, Ford's top selling vehicle, were down almost 42 percent for the month.
But Pipas said that full-size pickup truck sales are better industrywide when compared with May levels, due largely to increased incentive spending. He also said residual values have improved on pickup trucks and SUVS since May, putting many customers in a better position to trade in vehicles.
Ford, like its U.S.-based competitors, has been trying to shift its factories and model lineup from trucks and SUVs to more efficient cars and crossover vehicles, while burning through billions of dollars in cash. The Dearborn-based automaker has lost $23.9 billion in the past 2 1/2 years and has had to mortgage its assets to stay in business.
GM has performed strongly overseas, but plummeting demand for its most profitable products in the U.S. has led to losses of $57.5 billion in the past 18 months, including $15.5 billion in the second quarter.
Light truck demand at GM fell 19 percent in September, as sales of the Trailblazer dropped 31 percent and demand for the Tahoe fell 52 percent. sales of Chevrolet full-size pickups fared comparably better, edging down just 5.5 percent.
GM's car sales slid 10 percent, as a 17 percent drop in Cobalt sales and combined declines of more than 30 percent for both Cadillac and Buick cars off set a 68 percent jump in Malibu sales and 17 percent increase in demand for its Impala.
In afternoon trading Wednesday, Ford shares fell 69 cents, or 13.3 percent, to $4.51, while GM shares fell 7 cents to $9.38. Toyota's U.S. shared fell $2.12, or 2.5 percent, to $83.68, and Honda's U.S. shares dropped 57 cents, or 1.9 percent, to $29.54.
The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 25 sales days last month, one less than in September 2007. |
