Many Automakers Post Record Losses for January
General Motors’ January sales dropped 49 percent over the previous year. Ford reported a 40 percent drop in U.S. sales, with Toyota hitting a 34 percent decline and Nissan reporting a 30 percent drop.
Chrysler LLC posted the largest dip, with a 55 percent sales plunge. European automakers also posted significant losses, with Mercedes-Benz maker Daimler AG and Porsche down 36 percent, and Volkswagen AG off 12 percent.
For the first time, China surpassed the United States as the world’s largest auto market on a monthly basis due to combined U.S. auto companies’ losses, according to media reports.
At the end of 2008, U.S. auto sales had plunged 18 percent as the credit crunch, low consumer confidence, growing job losses and the deepening global financial crisis impacted the industry.
Many automakers had attempted to boost their sales declines by offering special deals and discounts, cut-rate financing, employee pricing and cash-back rebates.
Ford said there was some signs that could point to better times ahead — January showroom sales appear to have stabilized even though sales to rental agencies were down sharply. Also, used car prices have stopped falling.
“What we are looking for at this point is stabilization,” said Ford economist Emily Kolinski Morris. “You have to stop falling before you can start rising.”
GM sales analyst Mike DiGiovanni said that tight credit continued to pressure U.S. auto sales for the entire industry.
“People are coming in, wanting to buy vehicles and they’re being turned down, just that simple,” DiGiovanni said. “And we have to break and thaw the credit markets for consumers who want to buy automobiles.”
GM and Chrysler are both attempting to restructure and reorganize with the infusion of a portion of the more than $17 billion in federal loans that the Bush administration approved in December. Ford’s management chose not to immediately seek federal loans.
U.S. automakers are entering their fourth consecutive year of sales declines, but the losses are newer for European and Asian automakers, whose numbers fell sharply in the final months of 2008.
New car sales in Germany fell by double-digits in January as fear of the deepening global recession spread throughout that country.
Japan’s largest auto parts maker, Denso Corp, predicted its first-ever annual loss and said it will have to make organizational spending adjustments to offset its declining revenue.