Automaker Sales Continue Dismal Slide

Chrysler Sales Drop 53% In December; Ford, Toyota, Honda Not Much Better Amid U.S. Economic Angst

(CBS/AP)  By every measure, 2008 was one of Detroit's worst years on record, reports CBS News business correspondent Anthony Mason. Chrysler's sales went off a cliff, plunging by 30 percent in 2008. Ford and General Motors were each down more than 20 percent.

GM hasn't seen a sales number that bad since Dinah Shore was singing its jingles, half-a-century ago.

"The consumer has basically, frankly pulled out of the market," says Tom Libby with J.D. Power.

Chrysler said Monday its December sales dropped 53 percent because of the recession and fewer fleet sales, while Toyota Motor Corp. reported a 37 percent slide and Honda Motor Co. said its sales tumbled 35 percent.

And it wasn't just gas guzzling models that took a hit either. Sales of Toyota's hybrid Prius fell 45 percent in December. Enterprise, the country's largest rental car company, is cutting its new car purchases by almost half this year - that's nearly 400,000 vehicles - part of the reduction in fleet sales Chrysler complained about.

So all the car makers are getting desperate, Mason reports. Hyundai is offering to buy back cars from customers if they lose their jobs. GM's new zero percent financing for certain models has brought some shoppers into showrooms.

"We're getting traffic which leads to sales in most cases," says John LaSorsa, who runs a Bronx, New York car dealership. "I think customers are still trying to figure out what's happening in the market."

But even with a recent influx of showroom traffic, LaSorsa says he doesn't expect sales to improve much in the short term. He's laid off 15 employees, almost a quarter of his staff, and now he says he's running the business from day to day.

"We can't see ahead," LaSorsa says.

At the auto research company, J.D. Power, they see a gradual recovery later this year, Mason reports.

"But the overall year 2009, actually we're forecasting will be worse than 2008," Libby says.

Only eight years ago the industry sold a record 17.4 million vehicles. This year J.D. Power predicts that will fall to 11.4 million, a 16-year low. Even if Detroit can pull a U-turn, the comeback will have a long way to go.

The auto Web site Edmunds.com predicted sales for the full year, 2008, will total just over 13 million, down 18 percent from 2007 and the lowest level since 1992.

Subaru of America Inc. said its U.S. sales crept higher in 2008, making the Japanese company likely to be the only major automaker with a yearly sales increase. Subaru's U.S. sales rose by 0.3 percent to 187,699 vehicles from 187,208 in 2007, as consumers snapped up its top-selling Forester and Impreza models.

Chrysler's December sales totaled 89,813 vehicles, compared with 191,423 in the year-ago month. Despite the plunge, the recent month's sales represented a 5 percent increase over November levels. the Auburn Hills, Mich., carmaker said the December drop included a 63 percent decrease in fleet sales.

Ford said it sold 138,458 light vehicles in December, down from 204,787 in the same month in 2007. The automaker doesn't see much hope for improvement in early 2009, but predicted a small uptick later in the year.

"We expect the first few months of 2009 to feel much like last three months of 2008," Emily Kolinski Morris, Ford's senior economist, said during a conference call with reporters and industry analysts.

GM sold 220,030 light vehicles in December compared with 319,837 a year earlier. The recent month's results were boosted by heavy sales incentives, including financing offers announced near the end of the month after the Treasury Department said it would give $5 billion in federal aid to GM's ailing financing arm, GMAC LLC.

[gbdmd]

Which is why the auto industry should never have been given a single penny from the U.S. Government. It doesn''t matter how much the auto industry can scam from the taxpayers, if people don''t actually buy the cars, then the companies fail.

All this nonsense about "saving" the auto industry. People have to buy cars, and the last time I checked, there aren''t a whole lot of people with money to buy cars these days... so giving money to the auto industry is a complete waste of time.

[brannigon]

Well, the "bail out" really worked didn''t it? Well, they''ll be back for more money! Bend over and crack a smile America; here it comes again!

[brannigon]

Well, the "bail out" really worked didn''t it? Well, they''ll be back for more money! Bend over and crack a smile America; here it comes again!

[aztecdakota]

duhhhh. We America people were broke and many jobless, loosing the roofs over there heads. Bailout money is going to big business and they are crying they aren''t makeing any sales. Now the bailout money is going out, to business. BUT the American people are still the same as before the bailout, no change. Still broke, still jobless, still struggleing for a roof over their families heads. We STILL CANNOT afford to buy anything big anymore. One single loaf of bread costs from $2.50 to $5.00 per loaf. A family of 4 or 5 probably does one loaf a day. Oh, did you want lunchmeat to put between that bread????Mamma Mia!!

[aztecdakota]

duhhhh. We America people were broke and many jobless, loosing the roofs over there heads. Bailout money is going to big business and they are crying they aren''t makeing any sales. Now the bailout money is going out, to business. BUT the American people are still the same as before the bailout, no change. Still broke, still jobless, still struggleing for a roof over their families heads. We STILL CANNOT afford to buy anything big anymore. One single loaf of bread costs from $2.50 to $5.00 per loaf. A family of 4 or 5 probably does one loaf a day. Oh, did you want lunchmeat to put between that bread????Mamma Mia!!

[cheetah-man7]

It seems clear enough that the lack of buying cars is not just about buying better cars, but the simple fact that nobody wants to find themselves in even more debt for a new car. People are saving their money and not parting with it all that easily. I''d LOVE a new Toyota Prius, but would not buy right now until I knew that my job was more secure and that I can afford the payments...

[pepperwood2]

Automaker Sales Continue Dismal Slide! Maybe its just because the Consumers simply cannot afford to borrow & go in debt any further.

Each and everyday I keep getting phone messages about how I''m eligible for another credit card or mortgage loan or qualify for home improvement financing.

The only CHANGE I see is that the Banking, Auto, Big Oil, Wall Street CEO''s are getting bailed out by Washington. While the working class are STILL GOING to have to pay the outrageous interest that Congress has done nothing about. And to think of the largest pay increases in history that they voted for themselves. Maybe that''s the CHANGE in Washington they promised us?

[pepperwood2]

Automaker Sales Continue Dismal Slide! Maybe its just because the Consumers simply cannot afford to borrow & go in debt any further.

Each and everyday I keep getting phone messages about how I''m eligible for another credit card or mortgage loan or qualify for home improvement financing.

The only CHANGE I see is that the Banking, Auto, Big Oil, Wall Street CEO''s are getting bailed out by Washington. While the working class are STILL GOING to have to pay the outrageous interest that Congress has done nothing about. And to think of the largest pay increases in history that they voted for themselves. Maybe that''s the CHANGE in Washington they promised us?

[longtree-2009]

in this economy, automakers need to make their cuts within their corporate structure across the board. they need to lower auto prices to those of say year 2000 to match the slide of the economy. last bit of news claimed homes, prices, were at 2004 levels and still expected to slide further. dealers could also make internal cuts and offer autos at $500 over dealer cost. bottom line, it is not an economy as before the meltdown so lower prices to year 2000.

[hunterdon6]

The Big 3 started building cars in Mexico many years ago, thus laying off US workers. All this was done to maximize their profits. These workers without a job could not afford to buy from company A - B & C so these companies started laying off workers. And the trend continued. Now nobody can afford to buy the BIG 3 cars. Its only fitting that it comes back to haunt them!

Why would it be any different? We''re still in a recession and the public has no idea whether they''ll have a job tomorrow or not. A brand new car is a LUXURY and not a neccessity, and in these times of uncertainly most people will most often opt to fix their old cars than buy a new one. Only the rich, an idiot or one who doesn''t already own a mechanically sound working car will go out and buy a new car.

Bailing out the auto industry is only prolonging the eventual bankruptcy that these automakers will be facing in March or April.

Surely they''ll be screaming for more bailout, and I''m sure that some of our leaders (who stands to profit from the bailouts) will again vote to support it.

Unfortunately we the PUBLIC do not really have a say on this. Too bad that they cannot change the law that states that anything that requires the use of taxpayers money must go through a PUBLIC vote.

BTW: Have you seen the Gus Guzzling commercials that Crysler have on their DODGE RAM Trucks? And they expect the public to keep buying these junk?

[missingamerica]

See, the problem is the United States needs a beautification project to boost consumer moral.

You know, like tearing down all of those desolate, recently-vacated office buildings and manufacturing plants between them and the dealerships?

[u-r-right]

And how is the bailout loan money supposed to make it better for the big three? Answer: It won''t! If the people don''t have money, there will be no autos sold.

Why would it be any different? We''re still in a recession and the public has no idea whether they''ll have a job tomorrow or not. A brand new car is a LUXURY and not a neccessity, and in these times of uncertainly will most often opt to fix their old cars than buy a new one. Only the rich, an idiot or one who doesn''t already own a mechanically sound working car will go out and buy a car.

Bailing out the auto industry is only going to prolong the eventual bankruptcy that these automakers are facing in March or April.

Surely they''ll be screaming for more bailout, and I''m sure that some of our leaders (who''ll profit from the bailouts) will again vote to support it.

Unfortunately we the PUBLIC do not really have a say on this. Too bad that they cannot change the law that states that anything this important MUST be approved (voted on) by the PUBLIC. After all, who''s money is being used for all these bailouts?

Why would it be any different? We''re still in a recession and the public has no idea whether they''ll have a job tomorrow or not. A brand new car is a LUXURY and not a neccessity, and in these times of uncertainly will most often opt to fix their old cars than buy a new one. Only the rich, an idiot or one who doesn''t already own a mechanically sound working car will go out and buy a car.

Bailing out the auto industry is only going to prolong the eventual bankruptcy that these automakers are facing in March or April.

Surely they''ll be screaming for more bailout, and I''m sure that some of our leaders (who''ll profit from the bailouts) will again vote to support it.

Unfortunately we the PUBLIC do not really have a say on this. Too bad that they cannot change the law that states that anything this important MUST be approved (voted on) by the PUBLIC. After all, who''s money is being used for all these bailouts?

Why would it be any different? We''re still in a recession and the public has no idea whether they''ll have a job tomorrow or not. A brand new car is a LUXURY and not a neccessity, and in these times of uncertainly will most often opt to fix their old cars than buy a new one. Only the rich, an idiot or one who doesn''t already own a mechanically sound working car will go out and buy a car.

Bailing out the auto industry is only going to prolong the eventual bankruptcy that these automakers are facing in March or April.

Surely they''ll be screaming for more bailout, and I''m sure that some of our leaders (who''ll profit from the bailouts) will again vote to support it.

Unfortunately we the PUBLIC do not really have a say on this. Too bad that they cannot change the law that states that anything this important MUST be approved by the PUBLIC. After all, who''s money is being used for all these bailouts?

[aztecdakota]

Plus, we still do not have any money. A loaf of bread is 4 to 5 dollars now. get real.

[aztecdakota]

Excuse me Americans, does anyone see what is wrong with this picture? American people are going broke, losing jobs and getting laid off, could not pay their bills. US GOVERNMENT giving BIG BUSINESS, 850 BILLION DOLLARS, bailout money. That is so nice. Why is problem not being solved. pay close attention to this. AMERICAN PEOPLE ARE GOING BROKE, LOSING JOBS, THEIR HOMES, GETTING LAID OFF, THEY CANNOT PAY THEIR BILLS BECAUSE THE AMERICAN "PEOPLE" DO NOT HAVE MONEY TO BUY ANYTHING. Thus the automobile industry who have received "bailout money" are not makeing because people are not buying cars. Hello Americans, does anyone see what is wrong with this picture?

[trogwolf]

"When I can go to a car lot and see prices that actually fit the average wages in this country I MIGHT buy a new car."
According to data from Chrysler, a UAW assembler earned $64,100 in monetary wages in 2006 (not including benefits), and a UAW electrician earned $74,800 in monetary wages. According to BLS data (available here from Economagic), the average manufacturing wage in mid-2006 was $16.78 per hour, meaning that the average manufacturing worker earned cash income $33,560 in 2006, or about half of a UAW worker. A huge % of the population earns less than $25,000 ($12.50 per hour). these people can''t afford cars made by people earning $64K to $75K plus benefits.

[hypnotoad72]

The core issue appears to be jobs-related.

And if it''s true companies like Ford get their parts from Chinese manufacturers, then they are indeed overpriced. (I have no factual data to represent that claim. Only people who have purported to claim it, for having once owned a Ford truck and had to get it serviced all the time and it was revealed to them.)

Ironically, the only truly US-made vehicle is Toyota. Same source.

Which is why I wouldn''t trust anything less than a Subaru, Honda, or Toyota nowadays. :(