Daily Auto News Auto Sales Plunge to Near 30 Year Low
Daily Auto News
The last time Americans bought cars this slowly, we were reeling from a recent surge in gas prices, watching a new President take steps to radically alter government’s role in the economy, and America’s automakers were losing market share to Japanese rivals who built smaller, more fuel-efficient cars.
The AFP explains, “US auto sales extended their downward spiral in February, falling 41 percent to the lowest rate since December 1981.”
Some analysts push the date even further back. Mike DiGiovanni, head of industry analysis at General Motors, told AFP, “This will be the lowest February on record going back some 42 years to 1967.”
The AP adds, “General Motors’ sales tumbled 53 percent from a year earlier, while Ford’s U.S. sales fell 48 percent. Toyota’s sales fell 40 percent, and the other major Japanese automakers were only slightly better,” as “Honda Motor Co.’s sales dropped 38 percent and Nissan Motor Co.’s fell 37 percent.”
Chrysler, meanwhile, “Admitted that its total fell 44 percent” last month, according to Time. The plunge was even worse than Chrysler and GM had predicted when both asked the government for additional bailout funds last month. “Both companies are running low on the money they need to operate. GM ended the year with $14 billion, about what it needs to keep the lights on. Chrysler was forecasting that it would start March with just $2.4 billion. Without a boost from the government, GM and Chrysler could each be forced into bankruptcy or liquidation by the time the crocuses bloom.”
Luxury brands fared no better. Bloomberg notes, “Toyota’s Lexus fell 38 percent, Bayerische Motoren Werke AG’s BMW dropped 38 percent and Daimler AG’s Mercedes-Benz declined 24 percent last month as the sagging U.S. economy crimped demand for luxury autos.”
The Detroit Free Press notes, “Hyundai managed to turn in the best performance among major automakers — thanks to the launch of the well-received luxury Genesis full-sized sedan, high-profile marketing during the Super Bowl and other events, and a unique incentive program called Hyundai Assurance,” which allows consumers to return new cars if they lose their income. Hyundai posted a 1.5 percent sales drop in February – which passes for success in this economy.
The government took steps to loosen consumer credit, but some analysts say the moves might be too little, too late. Al Castignetti, vice president of sales for Nissan USA, told Bloomberg, “At this point, it’s not as much credit as it is a consumer confidence issue. Even if you can afford the loan, people are not willing to take on the risk right now because of concern about jobs.”
The Free Press adds, “The Conference Board, a nonprofit organization that has been monitoring consumer confidence since 1967, said Feb. 24 that its measure of consumer confidence plunged in February to an all-time low of 25, down from 37.4 in January.”
Still, a few see signs of hope. The AP explains, “Rising used car prices are an indication that new car sales may be near the bottom, because more people will opt for new cars when they see they won’t save as much by buying a used vehicle.”
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