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. GM sales tumbled 53% from a year earlier, while Ford’s U.S. sales fell 48% and Chrysler’s fell 44%. 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.
According to the AP, 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.
That was the U.S. sales figure for the month, a sign that the new car market could hit the lowest point in more than 27 years as huge rebates and low-interest financing are not working this time around. Ford, the first automaker to report sales Tuesday, said it sold 99,060 vehicles last month, compared with the 192,248 it sold in February 2008. Sales of its F-Series truck, traditionally the best-selling vehicle in the U.S., fell 55%, while sales of the Focus small car also dropped, by 39%. Ford is preparing for sales to remain depressed, planning to produce 425,000 vehicles in Q2, down 38% from the 685,000 it made in last year’s April-June period.
GM said it expects to make 550,000 vehicles in Q2, a decline of about 34% from year-ago levels. Hyundai’s creative "Assurance" program helped it buck the trend of double-digit sales declines with a 2% drop in U.S. sales last month. Toyota’s U.S. sales plunged 40%, while Honda’s sales dropped 38% and Nissan’s fell 37%. Sales of the Toyota Camry, the best selling car in the U.S., sank by 41%. Demand remained strong for Honda’s Fit subcompact, whose sales dropped 2%, but sales of its top-selling Accord sedan fell 42%, according to The AP story. Most other automakers posted significant declines, but Subaru’s U.S. sales edged up 1% in February as sales of its top-selling Forester model doubled. Kia’s sales were about flat from a year earlier.
RBR/TVBR observation: Rising used car prices are at about an all-time high, vs. new car prices. A great idea for a local dealer campaign would be to do some comparison pricing around town and show how a new car or a lease are extremely competitive with used cars right now. “Get a better interest rate and end up paying about the same.” Most people will opt for new cars when they see they won’t save as much by buying used.