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Monday, January 05, 2009 1:27 PM


Auto Sales Collapse, GM At 49 Year Low


It was a grim December across the board for Automakers as GM’s 2008 U.S. Sales Plummet to 49-Year Low; Toyota, Honda Fall.

General Motors Corp.’s 2008 U.S. sales plunged to a 49-year low, dragged down by a 31 percent plunge in December as demand was ravaged by the recession and concern that the biggest domestic automaker might collapse.

Toyota Motor Corp.’s U.S. deliveries plummeted 37 percent last month, while Honda Motor Co. slipped 35 percent, Ford Motor Co. fell 32 percent and Nissan Motor Co. was down 31 percent, pointing toward the industry’s worst annual volume since 1992.

The federal rescue of GM and Chrysler LLC couldn’t overcome the weight of consumer pessimism and tight credit in the world’s biggest auto market. Ford’s annual U.S. sales sagged to a 47-year low, while GM’s total of 2.98 million was the least since 1959, according to trade publication Automotive News.

“If consumer confidence doesn’t snap back soon, it’s going to be difficult for the automakers,” said John Wolkonowicz, an analyst with IHS Global Insight Inc. in Lexington, Massachusetts. “It isn’t just GM, Ford, Chrysler that are suffering from this. It is the entire auto industry globally.”
Ford, Honda Sales Tumbled More Than 30%

Bloomberg is reporting Ford, Honda December Auto Sales Tumbled More Than 30%
Ford Motor Co. said U.S. sales fell 32 percent in December, while Honda Motor Co. posted a 35 percent decline as the recession curbed demand in the world’s biggest auto market.

Sales at Ford, the second-biggest U.S. automaker, dwindled to 139,067 cars and trucks, from 195,105 a year earlier, the Dearborn, Michigan-based company said today in a PR Newswire statement. Honda, No. 2 in Japan, was down to 86,085 vehicles from 131,792, said Chris Martin, a spokesman.

Honda’s December slide dragged the company to its first annual U.S. sales decline since 1993, while the industry’s 2008 total may have been the lowest in 16 years. Last month’s federal rescue of General Motors Corp. and Chrysler LLC failed to stem consumer pessimism and tight credit.

Sales globally have begun to crumble as well. Auto sales in Japan dropped 5 percent in December and finished the year at a 28-year low as a recession there sapped demand for Toyota and Nissan vehicles. French auto sales fell 16 percent in December.
Honda U.S. December Sales Declined 35%

Make it a clean sweep of the major automakers reporting today as Honda Says U.S. December Sales Declined 35%.
Honda Motor Co., Japan’s second- largest automaker, said U.S. sales fell 35 percent in December, dragging the company to its first annual decline in the market since 1993.

Sales dwindled to 86,085 cars and trucks, from 131,792 a year earlier, a spokesman, Chris Martin, said today in an interview.

Honda led off the industry’s monthly reports that may close the worst year for U.S. sales since 1992. The federal rescue of General Motors Corp. and Chrysler LLC in December failed to stem consumer pessimism and tight credit that eroded demand for every automaker selling cars worldwide.
Attempts to revive auto sales will be futile. There is no pent up demand for autos and promotional sales will do nothing more than bring a bit of future demand forward.

Consumers are retrenching because they need to retrench. Why is it the Fed, the Treasury, and Congress cannot understand this simple economic construct?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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