Automaker Sales Continue Dismal Slide

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

(CBS/AP) 

The sales slump continues to mean good deals for consumers. Aaron Bragman, automotive marketing research analyst for IHS Global Insight in Troy, Mich., said large incentives such as zero-percent financing and rebates will continue well into 2009 as automakers try everything they can to boost sales.

Full-size truck incentives ran from $7,000 to $8,000 in December, and Bragman expects that to continue all year as the economy fails to improve.

"You look in the paper and the deals on brand new GM pickups are astonishing," he said. "The discount that you get buys a heck of a lot of gasoline."

One automaker, Hyundai Motor America, is trying to woo skittish buyers by promising to let them return cars free for up to a year if they lose their jobs and can't make the payments.

The "Hyundai Assurance Program" applies to customers stricken by misfortune outside of their control, such as losing their job, becoming disabled or losing their drivers license for medical reasons. It covers depreciation up to $7,500.

John Krafcic, president of Hyundai Motor America, said traditional incentive spending in the fourth quarter was about half as effective industrywide compared with the same quarter in 2007.

"We needed to think about turning some other knobs to turn sales," he said. "This is all about fear."

Similar bold moves might be necessary throughout the year. Global Insight predicts that U.S. sales will drop from 13 million in 2008 to 10.3 million this year as the economy continues to sputter.

While that may bring deals for consumers, it's bad news for the automakers. GM and Chrysler were forced to go to the government for loans to hold off bankruptcy, and Ford says it may need government money if sales don't recover in 2009.

But Bragman said the sales drops are not unique to the U.S.-based automakers and encompass the entire domestic market.

Toyota said it sold 141,949 vehicles in December, down from 224,399 a year earlier. Sales of the Prius hybrid dropped 45 percent as gas prices fell from their record highs in July.

Honda sold 86,085 vehicles last month, down from 131,792 a year earlier but up from 76,233 in November. Nissan. The month-over-month improvement was a trend seen by most automakers.

Nissan sold 62,102 vehicles - including Infiniti models - in the U.S. compared with 89,555 in December 2007. For 2008, Nissan U.S. sales dropped 11 percent.

Ford said it sold 43,087 Ford, Lincoln and Mercury cars last month, down 26 percent from December 2007. The company sold 90,418 Ford, Lincoln and Mercury light trucks in December, 34 percent fewer than the same month a year earlier.

Ford said there was a glimmer of hope in its sales figures. Its market share was 14.6 percent, up 0.7 percentage point from December 2007 and the first time since 1997 that the company has seen its share go up three straight months.

It also sold 195,823 Focus compacts in 2008, the highest total since 2004 and a 13 percent increase from 2007.

"This is a strong ending to end a very challenging year," Jim Farley, Ford's group vice president for marketing, said in a statement.

Farley said incentives for consumers later this year largely will depend on each manufacturers' inventories, but he sees strong incentive spending and good deals for consumers at least through the first quarter.

GM, which said its market share held steady at 22 percent for the year, said its December car sales totaled 87,506, down 25 percent from the year-ago period. But the total included a 43 percent jump in Malibu sales and a 19 percent increase in Impala sales.

December light truck sales fell 25 percent to 132,524 units and included a 66 percent plunge in demand for the TrailBlazer SUV and a 34 percent drop in Sierra sales.

[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. :(