American Auto Dealers Continue To Get Dealt Setbacks
Monday, January 05, 2009SUSIE GHARIB: December capped a dismal year for the nation's auto makers with even fewer cars and trucks leaving dealer showrooms. Sales at General Motors and Ford each tumbled about 32 percent last month, while Chrysler's plunged 53 percent. Japanese rivals Toyota and Honda also felt the sting of the recession. Their U.S. sales fell 37 percent and 35 percent respectively. Now almost half of those sales came in the final week of December as buyers locked in year-end bargains and took advantage of new incentives. As Diane Eastabrook reports, GM and its customers benefited the most.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: Luis Perez is hoping to start the New Year with a new Pontiac Vibe.
LUIS PEREZ, CAR SHOPPER: It's lower than the normal price and it's a good car as far as I know, so I'm thinking of getting it.
EASTABROOK: In the past week, lower price tags on GM vehicles like the Vibe have brought more consumers like Perez to dealer lots. But helping GM even more has been the return of cut-rate financing as well as an easing of credit standards by its financing unit GMAC. After receiving $5 billion in aid from the Federal government, last week GMAC said it would again make loans to consumers with lower credit scores. Ken Taheny, general sales manager for a Pontiac GMC dealership, thinks the new programs could help thaw the frozen vehicle market.
KEN TAHENY, GENERAL SALES MGR., NAPLETON PONTIAC/GMC: We're looking for the people that may have thought about purchasing a car in the near future or maybe are considering purchasing a new car in the next year.
EASTABROOK: Industry watchers estimate General Motors may have lost as many as 30,000 sales a month after GMAC tightened credit requirements last October. Global Insight auto analyst George Magliano thinks temporarily loosening credit could give vehicle sales a boost, but it won't turn them around.
GEORGE MAGLIANO, AUTO ANALYST, GLOBAL INSIGHT: It will put some more as I say, some more volume into the numbers, but it's never going to buck the trend that we're seeing in the market place now. Sales are going to stay low throughout the industry because it's being wracked by a recession, the worst recession we've probably seen in our post-war history.
EASTABROOK: Fabian Guercio agrees. The general sales manager of a Chevrolet dealership doesn't think consumers will start buying again until they've regained confidence about their jobs and the economy.
FABIAN GUERCIO, GENERAL SALES MANAGER, HOSKINS CHEVROLET: As a consumer you're going to be scared. Who wants to go out and spend $40,000 if you're not sure what tomorrow's going to bring?
EASTABROOK: GM's low rate financing program ends today. But GMAC's lower credit requirements will continue indefinitely. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Elk Grove Village, Illinois.
