TOPICS > Economy

Auto Sales Plunge in December

BY Admin  January 5, 2009 at 4:10 PM EDT

Chrysler dealership; AP file photo

Ford Motor Co.’s U.S. sales fell 32 percent in December, while General Motors Corp.’s dropped 31 percent, according to figures released Monday. Chrysler reported its December U.S. sales plunged a staggering 53 percent, blaming a tough economy for keeping customers from showrooms.

Chrysler sold a total of 89,813 vehicles compared with 191,423 in the same month last year. Despite the drop, the month’s sales were up about 5 percent from November levels.

Toyota and Honda’s U.S. sales, meanwhile, fell more than some of their U.S. competition in December, with Toyota registering a 37 percent decline and Honda showing a 35 percent drop — a likely sign that consumers decided against new purchases amid a gloomy economy despite the popularity of fuel-efficient Japanese cars.

“Consumers are scared,” Erich Merkle, an auto analyst in Grand Rapids, Mich., told Bloomberg News. “People that are going to be laid off won’t be buying cars, and even those that are working are likely delaying purchases.”

Analysts expected auto sales industry-wide to drop up to 40 percent in December as consumers remain uncertain about the economy and their jobs, according to the Associated Press.

Ford’s sales for 2008 fell 21 percent from a year earlier, keeping the automaker in third place in the U.S. auto sales race, falling behind Toyota Motor Corp. for the second straight year.

Toyota’s 2008 sales fell 16 percent to 2.22 million, compared with Ford’s 1.98 million. Detroit-based GM’s 2008 sales totaled 2.95 million, down 23 percent from the previous year. Honda Motor Co.’s 2008 sales fell 8.2 percent, the AP reported.

For all of 2008, Chrysler said its sales slid 30 percent to 1.45 million vehicles.

Subaru of America Inc. said its U.S. sales rose in 2008, poising the Japanese company to be the only major automaker with a yearly sales increase.

“This is a domestic market problem because we see the same kinds of declines at Toyota and Honda as we see at GM and Ford,” Aaron Bragman, automotive marketing research analyst for IHS Global Insight in Troy, Mich., told the AP. “It’s not a matter of getting financing. It’s a matter of getting shoppers.”

The Wall Street Journal noted that Ford took an optimistic view of December’s results, noting that its December market share rose to 14.6 percent, up 0.7 percentage point from a year ago.

“This is a strong ending to … a very challenging year,” said Ford marketing chief Jim Farley, according to the Journal.

Ford said it sold 138,458 light vehicles last month, down from 204,787 in December 2007. But even though its sales were dismal, Ford said it expects to fare better than the industry overall.

Ford was the only automaker among Detroit’s “Big Three” — which includes GM and Chrysler — to not ask for immediate aid during the automakers’ plea on Capitol Hill for government help to survive the financial slump and resulting credit crunch through bridge loans and other rescue measures. Ford says it may need government money if sales don’t recover in 2009.