Carmakers' U.S. Sales Continue Deep Slump

Feb. Sales For Ford, GM And Chrysler All Plummet; Industry On Track For Worst Month In Nearly 3 Decades

(CBS/ AP)  Major automakers' U.S. sales continued their deep slump in February, putting the industry on track for its worst sales month in more than 27 years as huge rebates and low-interest financing failed to spur fearful consumers to make a major purchase.

General Motors' sales tumbled 53 percent from a year earlier, while Ford's U.S. sales fell 48 percent and Chrysler's fell 44 percent. The major Japanese automakers fared only slightly better.

The slide casts further doubt on the financial viability of GM and Chrysler, which need to sell cars and generate critical cash to supplement the $17.4 billion in government loans that are keeping them in business.

Automakers and analysts have been predicting sales will rebound in the second half of this year, but they are becoming less certain. Massive layoffs, the stock market decline and sliding home values are prompting people to hold on to their cars longer, while those who are buying are more often opting for a used car or truck.

Emily Kolinski Morris, Ford Motor Co.'s top economist, said retail sales to individuals had been stable for four months but dropped in February, indicating that last month may not be the bottom for auto sales.

The bottom, she told reporters and industry analysts, can't be predicted. But she said Ford's forecast still calls for a modest second-half recovery as economic stimulus measures takes hold.

Industry analysts say when all the numbers are tallied, February sales could be worse than January's total of 656,976 light vehicles. That was the lowest monthly total since the industry sold 656,310 vehicles in December 1981, according to Autodata Corp. and Ward's AutoInfoBank.

The trough is likely even though automakers spent more on rebates, low-interest financing and other incentives in an effort to bring out buyers. But despite the fantastic deals, sales continued to slump.

"If it wasn't for the generous level of incentives now, we probably would be seeing even lower sales, if you can believe it," said Jesse Toprak, executive director of industry analysis for the auto Web site Edmunds.com. "It seems it can't get lower, but it could."

Ford, which hasn't taken any federal assistance, is preparing for sales to remain depressed. The Dearborn company said it plans to produce 425,000 vehicles in the second quarter, down 38 percent from the 685,000 it made in last year's April-June period.

Detroit-based General Motors Corp. said it expects to make 550,000 vehicles in the second quarter, a decline of about 34 percent from year-ago levels.

Toprak said there's little automakers can do to spur sales.

"You can spend money on marketing or incentives. That's all you can do," he said. "Neither is having a big impact on sales. That tells us it's really consumer confidence and the general negative state of the economy overall causing consumers to postpone making purchase decisions."

Industrywide, the average incentive per vehicle last month rose 8 percent from January to $2,914 per vehicle sold, Edmunds said. Incentives climbed to an average of 20 percent of the sticker price of a new car, and they topped more than $10,000 on some vehicles.

Hyundai Motor Co.'s creative "Assurance" program helped it buck the trend of double-digit sales declines with a 2 percent drop in U.S. sales last month. The South Korean company's program allows buyers to return a vehicle within a year if they can't make the payments due to a misfortune such as job loss or disability.

Long term, there are some good signs - like an increase in used car sales, reports CBS News' Jeff Gilbert from Detroit.

"A stable used car market is almost always a precursor to an increase in new car sales," said Ford analyst George Pippis.

Edmunds said its data show that 27 percent of people who intended to buy a new car switched to used at the dealership in February.

There is hope for a rebound, however. Rising used car prices are an indication that new car sales may be near the bottom, because more people will choose a new car when they see they won't save as much by buying used.

Ken Czubay, Ford's vice president of U.S. sales and marketing, said higher values also make dealers more likely to take trade-ins on new cars, which could move the market to "a more natural balance between new and used."

Ford will continue its strategy of reducing low-profit fleet sales and not relying on large incentives to sell vehicles, Czubay said, protecting the company's trade-in values.

"We are zigging while some of our competitors are zagging in the incentive world," he said.

The sales slump hit Ford at both ends of its model lineup. Sales of its F-Series truck, traditionally the best-selling vehicle in the U.S., fell 55 percent, while sales of the Focus small car dropped 39 percent.

Toyota's U.S. sales plunged 40 percent, while Honda Motor Co.'s sales dropped 38 percent and Nissan Motor Co.'s fell 37 percent.

Sales of the Toyota Camry, the best selling car in the U.S., sank by 41 percent. Demand remained strong for Honda's Fit subcompact, whose sales dropped 2 percent, but sales of its top-selling Accord sedan fell 42 percent.

Most other automakers posted significant declines, but Subaru of America Inc.'s U.S. sales edged up 1 percent in February as sales of its top-selling Forester model doubled. Motor Trend magazine named the Forester its sport utility vehicle of the year in the fall.

Kia Motors Corp.'s sales were about flat from a year earlier.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of light vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 24 sales days last month, one fewer than in February 2008.

[Huizilopochtli]

no not good enough at all,
im getting a better deal from Hondal, close to what i mentioned in my previous post.....

[win4usa]

cheetah-man7....I agree we should have an idiot tax....For everyone who voted for Obama. Our country is a mess because of a lot of people and not limited to Bush and politicians. It's a disgrace for Obama to be spending money for welfare, illegals and people who haven't been financially responsible. These problems won't be solved by throwing massive amounts of money at them. Where do you think all this money is going to come from?

[bobnjersey]

[hey GM Ford, Chrysler, ill take a car from you if you give it to me half off sticker price, 2.2% Interest but will go as much as 6.2% if you take my Land rover. add an extended warranty free of charge. and we have a deal.]
[Posted by Huizilopochtli at 4:43 PM : Mar 3, 2009 ]

hey 'huiz', they'll be happy to sell you a car if you sign over half a years income to them in advance, agree to contribute to their workers pension fund, you pay half for all repairs in the first three years, and all of the cost of the repairs in the remaining years ... and bear some of the fiscal responsibility of the company in the event it hits tough times.

what's that ... these terms don't work for you ... what's the problem ... it's good for them ... isn't that good enough?

[cheetah-man7]

Come on folks, where is your pride in being AND BUYING American?
Posted by rkennedy911

_________________________

Pride is not the issue. Quality is. Until the American car manufacturers start to create quality cars, they will continue to suffer and we "proud Americans" will continue to buy Japanese cars which we can actually count on for reliability and service.

[rkennedy911]

The Early Show just aired a piece where they had a gentleman from Consumer Reports on the program. He listed the top vehicles that Americans should go out and buy...they were ALL Honda's and Toyota's. Personally, I think it would be much more RESPONSIBLE to encourage American's to purchase a car built right here in Detroit rather than sending their money to Japan. Come on folks, where is your pride in being AND BUYING American?

[jodyrae4]

Last Ford I owned caught on fire because of a faulty ignition system, It had been sitting in the parking lot at work for about 2 hours and someone noticed it was on fire! My kids could have been driving this car ...I WILL NEVER BUY ANOTHER FORD....
Ford and the others need to get back to having good work ethics and pride in their work

[MalloryDavis]

This is quite a sad time, really. I love my Chrysler Corporation PT CRUISER.

[cheetah-man7]

I read a lot of comments on how messed up things are and I just want to ask what the __ -- did you expect to happen when yopu voted in the person you voted for did any one ever ask just what he beleaved or what he was going to do when he made all those changes???? Change for sake of change isn't useally good Just look back when this ever happen before an the tutre out is justy what we were told would happen. When we get change without direction it is usually just confusion!!!!!!!

Posted by alice holley

________________________________________________________

It's much to early in the morning to read this nonsense. There should be an idiot tax for all the morons who actually blame Obama for their current plight. Voila, add an idiot tax and there goes the recession! We'll all be in the black again very quickly!

[eatech]

RF35 I agree with you to a point. You have one flaw in what you are saying. The reason that the Big 3 dont make fuel savve cars is because the big oil companies was giving the Big 3 Auto makers money and perks, more perks than money. A car that uses more gas puts more money in the pocket of big oil. (now that the fat lady is singing Big oil is laughing at the Big 3 autos saying "Suckers" and keeping the money and perks for themselves)Case in point why did the diesel not make it in cars in the USA?? The reason is becasue at the time when they made diesel for cars diesel was extreamly cheap about 20 to 30 cents. the big oil companies went Frack we will lose money. So they got the Big 3 auto makers to make a very poor Diesel, GM made a 350cid gas conversion. that motor was terriable so the american people said Frack No I wont buy a diesel. Funny other countries have diesels in there cars and they are excellent. I think that the big 3 autos should worry and worry big time for pay back is a B.1.T.C.H.

[rf35]

Why would anyone buy an American-made car in this economy? You know oil prices are going to go back up soon. I'm still looking to buy a Prius when I get back to the States. Its gas mileage is pathetic compared to the ones I could get here in England, but it's the best available in the US at the moment. Show me a 50+ mpg American car for a reasonable price and I'll buy it in a heartbeat. But the big 3 will never produce anything like that. That's why import sales will continue to beat out American. The big 3 have dug their graves by refusing to pursue efficient/alternate fuel technologies and they will eventually have to lay in them. No amount of stimulus handouts will fix a poor business model. I still say that any company requiring a bail-out should be required to fire their entire top-level executive staff in order to receive the money.

[167irishboy]

The people who are the worlds consumers in America have been bled dry by all the free trade and American manufacturing moving to third world countries. Now nobody anywhere can afford the products they make. Not the slave labor workers in the third countries or the former well paid American workers now mowing grass for a living. The super rich for a short time made truck loads in the beginning of all the free trade, but now they've "hit the wall" and the mining of all the money Americans had is over with and there are too few good paying jobs to support the industries that have moved overseas.

The government can print more and more money, but in the end we can't all just service each other. Somebody has to actually make something for a good wage, not southern plantation wages.

[whitemale08]

According to Wall Street Republicans, Toyata was supposed to be better then GM because it didn't have unions...LMAO!

What a crock!

STOP GLOBALIZATION NOW!!!

[cg37102006]

wow more disastrous numbers. I now wonder whether any of the big three can survive. sales are off almost 50% from last year? this is a catastrophe. I think it is time to cut the chord. no more bailout money. just help them do a structured bankruptcy filing. all 3. its gotta be. at this rate none of the big 3 will make it to memorial day.

[cs4466]

Dump the republicans, go from there!

OH yes, we just did that. LOL!

[reggone]

alice holley, will you shut up with your crap. what did you expect the president to do? this problem we have is unlike any other in history, our economy is built solely on credit. McCain and Palin would have been better right? you wouldn't understand change if it smacked you in the face. for the past forty or so years we have been crying low taxes, low taxes! while wanting to keep strong defense and infrastructure, and good everything else, how in the hell can you have those things and have low taxes at the same time, YOU CAN'T! we let back woods idiots run this country to long, democrate or republican, obama makes sense to me. I served 4 tours in iraq and have seen first hand the no-bid rip off dick cheny contracts, you were being robbed eight years ago and you didn't even know it under bush. were do you think the money poured into (still pouring while bush is home on the couch) iraq came from? china buys our treasury bonds, the longer we stay there the weaker our dollar gets, if we fail, get ready to speak chinese.

[of11of]

good.

this is good.

no more bailout.

shouldn't have been one to start with.

let them fail.

we need electric and hydrogen trucks and cars.

america runs on chevys < term of the past.

my 35 year old 4x4 3/4ton chevy runs good.

alas. it needs to be preserved. not driven.

[breadline1]

force the major stockholders of the auto companies to sell there oil stocks and watch how fast the country gets flooded with electric cars. it's all about greed . nothing else.

[breadline1]

when are all you auto idiots going to wake up and smell the coffee !!! you all keep saying it's consumer confidence thats so low. bullsh*t. THE WHOLE DAMN COUNTRY IS OUT OF WORK !!!!!!!!!!!!!! HOW DO YOU EXPECT PEOPLE TO BUY CARS WITH NO MONEY OR JOBS !!!!! those who are working are simply trying to stay afloat. I've worked as a tech in dealerships for the past 30 years. I used to be able to afford new cars. My yearly wages have gone down almost 30% in the last 10 years. I haven't seen any payraise in the last 8 years. my blue cross premiums have gone up 140% in 7 years. cost of food and everything else has doubled. how do you expect anyone like me who still HAS a job to purchase anything but absolute necessities. want to sell products? bring back all the jobs you've shipped out of the country and give everyone a big FAT pay raise....... or forget about it and wait for the total collapse, because that's where we're heading the way things are going. no way around it !!

[Raymond Tilly]

Car sales in Germany were up 20% last month as a result of a German government program to trade in less fuel efficient vehicles.

Toyoda is asking the Japanese government for 2 Billion dollars to allow them to offer attractive financing and leases in the United States.

Blaming the UAW for the domestic auto company's problems seems to ignor that the problem is not just a domestic problem.

[Huizilopochtli]

hey GM Ford, Chrysler,
ill take a car from you if you give it to me half off sticker price, 2.2% Interest but will go as much as 6.2% if you take my Land rover.
add an extended warranty free of charge.
and we have a deal.