U.S. Auto Sales Fall 27%, Most Since 1991, on Credit (Update1) By Mike Ramsey and Alan Ohnsman
Oct. 1 (Bloomberg) -- U.S. auto sales tumbled 27 percent in September as the credit crisis and slowing economy dragged the industry to its worst month since 1991, when George H.W. Bush was president. Ford Motor Co.'s sales declined 35 percent from a year earlier and Toyota Motor Corp.'s dropped 32 percent, their poorest monthly performances in more than two decades. General Motors Corp.'s slid 16 percent, as incentives helped blunt its decline. Sales fell 37 percent at Nissan Motor Co., 33 percent at Chrysler LLC and 24 percent at Honda Motor Co. The September results extended the industry's slide to 11 consecutive months, the longest in 17 years. The financial crisis caused lenders to toughen loan standards and consumers curbed spending. The reduced availability of loans pinched automakers already hurt by gasoline prices that rose to a record in July. ``There is a psychological impact of all the news about banks in trouble,'' said Tom Libby, an analyst at marketing- research firm J.D. Power & Associates in Troy, Michigan. ``If people can wait to buy a car, they'll wait.'' Sales fell to 964,873 cars and light trucks from 1.31 million a year earlier, according to Woodcliff Lake, New Jersey- based Autodata Corp. The annual sales rate was 12.5 million, a drop from 16.2 million in September 2007, Autodata said. U.S. yearly sales reached a record 17.4 million in 2000 and averaged 16.8 million this decade. September's percentage decline was the biggest since January 1991, according to Ward's Auto Forecast in Southfield, Michigan. GM, Ford and Chrysler's U.S. brands' market share for the month rose to 52.3 percent from 50.8 percent a year earlier, as GM's sales fell less the industry's, according to Autodata. Asian companies held 39.9 percent, down from 42.1 percent. General Motors GM's sales of 282,806 cars and light trucks were down from 334,974 a year earlier. Adjusted for one fewer sales day last month compared with September 2007, the drop was 12 percent. On that basis, the average of 5 analysts surveyed by Bloomberg was for a 26 percent decline. ``We again gained retail share, and our total market share looks to be above 27 percent for the month without an increase in incentives,'' said Mark LaNeve, Detroit-based GM's vice president of North American sales, in a statement. GM today said it's replacing offers to all buyers of prices that its employees pay with no-interest loans of as long as six years on many 2008 models. GM's average incentive spending fell 2 percent last month from August to $3,972 a vehicle, according to Edmunds.com. That compares with $2,801 industrywide, almost unchanged from August. The automaker said leasing accounted for 1 percent of sales last month. Across the industry, lenders offered fewer leases and required higher down payments and interest rates, Libby said. Ford Ford said its sales fell to 120,788 from 184,612, the 22nd decline in the past 23 months. Sales of pickup trucks, sport- utility vehicles and vans for its U.S. brands tumbled 39 percent, as it sold 42 percent fewer F-Series pickups. Car sales for the Ford, Lincoln and Mercury brands fell 19 percent. Ford sales excluding Volvo were 116,734. That was its lowest monthly total since December 1981, according to Autodata. ``An already weak economy compounded by very tight credit conditions has created an atmosphere of caution,'' Jim Farley, Ford's worldwide marketing chief, said in a statement. The automaker is marking the 100th anniversary of the building of its first Model T. In 1924, Ford held 60 percent of the global automotive market, said John Wolkonowicz, auto analyst at Global Insight Inc. in Lexington, Massachusetts. In this year's first half, Ford was fourth in worldwide sales, behind Toyota, GM and Volkswagen AG. Toyota, Honda Toyota, second in the U.S. behind GM, said in a statement that September sales fell to 144,260 cars and light trucks from 213,043 a year earlier. The Toyota City, Japan-based company's monthly decline was its steepest since 32 percent in July 1987, said Bob Carter, vice president of its U.S. sales unit, in a conference call. Honda, Japan's second-largest automaker, sold 96,626 vehicles, down from 127,200 a year earlier, spokesman Chris Martin said in an interview. The percentage drop was the biggest for the company since November 1981. Sales fell across the Tokyo-based company's product line, except for the Fit subcompact, he said. ``We've done nothing different, but customers just weren't coming into dealerships,'' Martin said. Tokyo-based Nissan, Japan's third-largest automaker, said in an e- mailed release that it sold 59,565 vehicles, a drop from 94,269 a year earlier. Chrysler Chrysler reported sales of 107,349 vehicles, dropping from 159,799. The Auburn Hills, Michigan-based company announced new incentives for October, with cash discounts of as much as $6,000 and interest-free, 6- year financing on 2008 Dodge Ram pickups. Hyundai Motor Co., South Korea's largest automaker, reported a 26 percent drop in sales for the month. The Seoul-based company sold 24,765 vehicles, down from 33,214 a year earlier. European brands sold 75,204 vehicles, a 20 percent drop from a year earlier. Global Insight cut its 2009 estimate for U.S. auto sales to 13.4 million from 14 million, analyst Rebecca Lindland said in an interview at a GM reception in Paris. ``There's no sign of recovery we can point to,'' she said. The weakening U.S. economy, which has lost jobs in each month of 2008, has added to the strain on the auto industry. September non-farm payrolls likely fell by 105,000, based on 69 economist estimates compiled by Bloomberg. Consumer spending also was weakening even before the credit crisis intensified. The unraveling of the U.S. banking system has eroded confidence and tightened credit. In September, Lehman Brothers Holdings Inc. filed for bankruptcy and Washington Mutual Inc. failed as banks were unable to liquidate assets tied to risky home mortgages and as a result were running short of capital. To contact the reporters on this story: Mike Ramsey in Southfield, Michigan at [EMAIL PROTECTED]; Alan Ohnsman in Los Angeles at [EMAIL PROTECTED] Last Updated: October 1, 2008 18:27 EDT --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
