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U.S. Auto Showroom Traffic Dropped in Late September

Ford group vp Jim Farley U.S. auto showrooms were disturbingly empty at the end of September.

"It was tantamount, really, to a natural disaster, in the kinds of showroom traffic and 'ups' (shoppers) in showrooms we're accustomed to in the event of a large storm, or â€" and I hate to say this -- immediately following a 9/11 situation," said George Pipas, U.S. sales analysis manager for Ford.

Most cars are usually sold in the last 10 days of any given month, as the car companies and their dealers try to hit their monthly sales targets, and shoppers try and take advantage of the resulting bargains.

The deserted showrooms at the end of September took an obvious toll on U.S. auto sales. September sales were 26.6 percent below the year-ago month, according to AutoData. Year to date, 2008 sales were bad but not that bad, down 12.8 percent, to about 10.8 million.

In some parts of the country, there really was a natural disaster. Hurricane Ike disrupted business in the Southeast and in Texas, and its ripple efffects included gasoline shortages in markets like Atlanta.

For the rest of the country, automakers blamed the auto industry's version of the "CNN Effect," a term that gained currency in the first Gulf War. In this case, it means people stayed home to watch, and worry about, coverage of the ongoing financial industries crisis, and the efforts to push a bailout package through Congress.

In turn, that prompted consumers to worry about their jobs and the value of their investments, instead of going out to buy cars.

"The level of uncertainty has been elevated," said Jim Farley, Ford group vice president, marketing and communications. "If you think about what consumers are going through, even if you have good credit, there's a reluctance to pull the trigger on a big-ticket item," he said in an Oct. 1 conference call.

CNW Marketing Research said in a note distributed Oct. 1 that showroom traffic in the final 10 days of September fell 50 percent from the year-ago period, the worst drop since CNW started keeping track, in 1986.

Without confirming a specific number, Toyota's Bob Carter said that in terms of direction, the CNW estimate is a plausible industry number. Carter is group vice president and general manager, Toyota Division.

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