Auto sales hit new lows; GM sales plunge 41 pct.
By Bree Fowler
General Motors' November U.S. sales plunged 41 percent, while Ford's dropped 31 percent, dashing hopes that the industrywide drop in vehicle demand might be easing as Detroit's automakers prepare to state their second case for a federal bailout.
Their overseas rivals posted abismal results as well. Toyota's November sales tumbled 34 percent, and Honda's fell 32 percent.
A dreary economy, swooning consumer confidence and tight credit markets have combined to keep consumers out of vehicle showrooms this year. On Monday, the National Bureau of Economic Research said the U.S. entered a recession in December 2007, much earlier than most predictions.
October's seasonally adjusted annual sales rate of 10.6 million vehicles was worst in more than 25 years and far below the rate of 16 million a year earlier, according to Autodata Corp.
Many analysts had expected November sales to come in slightly better, noting that aggressive incentive spending and the plunge in gasoline prices may have put a floor under sales. But GM, Ford, Toyota and Honda Motor Co. all posted month-over-month sales declines, pointing to a potential industry wide drop.
Detroit-based General Motors Corp. reported a 44 percent drop in demand for cars, while light truck sales dropped 39 percent.
"In November we saw the continuation of the dramatic decline in volume for the industry," Mark LaNeve, GM's vice president of North American sales, said in a statement released by the company. "Every manufacturer is posting awful numbers and we are no exception."
Jim Farley, Ford Motor Co. group vice president of marketing, said he expects the industry to post continued year-over-year declines in auto sales until at least the second half of 2009.
"We could see some strengthening in the second half of next year, or at least some stabilization, albeit at a much lower level," Farley said in a conference call with analysts and reporters.
Farley said sales began the month at an improved rate but began skidding around mid-month, coinciding with the Detroit Three's presentation to Congress for $25 billion in loans. But he cautioned that numerous factors worked together to hobble sales.
"The talk of the bailouts and the bankruptcies and all the uncertainty and job loss has obviously done little to bolster consumer confidence," Farley said.
Dearborn, Mich.-based Ford said light truck sales for its namesake brand, Lincoln and Mercury were off 29 percent compared with November 2007, while the three brands' car sales were down 32 percent.
Toyota Motor Corp. Japan's No. 1 automaker, said truck sales plummeted 36 percent, while demand for passenger cars fell 32 percent, despite the automaker's extension of zero-percent financing on a dozen vehicles through the end of the month.
Toward the end of the month, Ford also announced offers of employee pricing, zero-percent financing and cash incentives on a variety of its vehicles in a move to offset one of the worst sales declines in the industry's history.
Automakers' sales reports are coming in the same day the U.S.-based automakers were scheduled to present plans to Congress for how they expect to return to profitability. Ford, GM and Chrysler LLC will go before lawmakers this week to ask a second time for a combined $25 billion federal loan to stave off bankruptcy.
Concessions are also expected from the United Auto Workers Union. UAW leaders from across the U.S. planned to hold an emergency meeting in Detroit on Wednesday to discuss concessions the union could make to help the companies get loans.
GM shares traded in positive territory most of Tuesday morning but fell 31 cents, or 6.8 percent, to $4.28 after its sales report. Ford shares rose 5 cents, or 2 percent, to $2.60 in afternoon trading, while Toyota's U.S. shares rose $1.76, or 3 percent, to $60.32, and Honda gained 44 cents, or 2.2 percent, to $20.38.
The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 25 sales days last month, the same as in November 2007.