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.