DETROIT (AP) - General Motors' October U.S. sales plunged 45
percent, and Ford's and Chrysler's weren't far behind, as low
consumer confidence and tight credit combined to bring the
industry's sales to an "unsustainably weak level" that is the
worst in 25 years.
Automakers sold 838,156 vehicles in October, 32 percent fewer
than the same month last year and the worst performance since
January 1991, according to Autodata Corp. and Ward's AutoInfoBank.
The seasonally adjusted annual sales rate of 10.6 million vehicles
was the since February 1983.
"It's really an unsustainably weak level for all
manufacturers," said Mike DiGiovanni, GM's executive director of
global market and industry analysis. "This is clearly a severe,
severe recession for the U.S. automotive industry and something we
really can't sustain."
The annual sales rate in October 2007 was 16.1 million.
Chrysler's sales tumbled 35 percent and Ford's dropped 30
percent. Toyota's sales fell 23 percent despite its zero-percent
financing offer, and Nissan and Honda posted 33 percent and 25
percent declines, respectively.
Overall, General Motors Corp. sold 168,719 vehicles in October,
while Ford Motor Co., including its Volvo brand, sold 132,278 light
vehicles and Chrysler LLC's sales totaled 94,530 units.
If GM's sales were adjusted for population growth, October would
be the worst month of the post-World War II era, DiGiovanni said.
"Clearly we're in a very dire situation," he said.
Detroit-based GM said its light truck sales tumbled 51 percent
compared with the same month last year, while demand for passenger
cars fell 34 percent.
Despite the steep drop, GM's total was enough to keep it ahead
of Toyota Motor Corp. for the No. 1 U.S. sales spot. Toyota, which
rolled out an offer of zero-percent financing during the month,
sold 152,101 vehicles. The Japanese company's light truck sales
fell 34 percent, while car sales dropped 15 percent.
Honda Motor Co.'s sales fell to 85,864 vehicles as truck sales
fell 29 percent. But sales of cars from its Acura luxury division
rose 6 percent.
Nissan Motor Co. sold 56,945 vehicles, and its truck sales
dropped 52 percent.
Ford officials said on a conference call with reporters and
industry analysts that as bad as October sales were, it's probably
not the bottom.
Emily Kolinski Morris, the Dearborn-based company's senior
economist, said that because automobiles are more durable, people
can wait without buying a new vehicle until they feel more
confident in the economy.
"The answer to when we will start to come out of that trough
lies in when the economy comes out of that trough," Kolinski
Ford likely will announce car and crossover vehicle production
cuts when it announces its third-quarter earnings on Friday, said
George Pipas, Ford's top sales analyst. Truck production cuts
earlier in the year have kept inventories low, but car and
crossover inventories need to be brought into line, he said.
Sales of the company's F-Series pickup trucks, traditionally its
top seller, fell 16 percent in October, better than Ford's light
trucks as a whole, which dropped more than 30 percent. The company
began selling a new version of the pickup last month and has
announced plans to add 1,000 workers at its Dearborn Truck Plant in
January to handle what it expects will be increased demand.
Even Ford's Focus small car, which had experienced sales
increases during the summer, saw its sales drop 18 percent.
Pipas said that even cars that once were selling well aren't
selling in a U.S. market that last month shrank to an annual sales
rate of about 11 million vehicles.
"In an 11 million industry, you're not going to see very many
products for very many manufacturers post year-on-year sales
Jim Farley, Ford's group vice president of marketing, said it's
likely auto companies will start their year-end sales promotions
early to try to drum up business, although he would not say what
steps Ford would take.
GM said it will start its annual "Red Tag" sale Tuesday, with
lower pricing and customer cash back on most of its new models. The
sale typically begins later in the year.
Chrysler said it would continue incentive programs introduced in
November that include cash rebates of up to $6,000 and discounted
financing on remaining 2008 model year vehicles.
The Auburn Hills-based company is also offering lease loyalty
allowances of up to $750 for purchases made by returning lease
customers, along with bonus cash of up to $2,000 on some 2008
vehicles for customers who lease through independent financial
After reeling from a 32 percent drop in September sales, Toyota
launched zero-percent financing on almost all of its models,
prompting analysts to predict that it could post
better-than-average October sales and potentially surpass GM for
the first time as the U.S. sales leader.
But, like at Ford, the vast majority of Toyota models still
posted double-digit declines. Notable exceptions included sales of
the Corolla, which rose 6.1 percent, and the Sequoia sport utility
vehicle, which posted a 21 percent gain.
Toyota Division General Manager Bob Carter said the financing
offer, which had been set to expire on Monday but will now be
extended for another month, gave October's sales a needed boost.
"This managed to breathe some life into an otherwise lackluster
month," Carter said.
Meanwhile, GM's financing arm, GMAC Financial Services, said it
was tightening its lending standards to require a credit score of
at least 700, potentially shutting out some buyers.
Mark LaNeve, GM's vice president for North American sales, said
steep cutbacks in leasing and lack of available credit accounted
for half of GM's year-over-year sales decline.
"There really needs to be actions focused on the consumer and
available credit," DiGiovanni said.
Analysts said GM's employee pricing incentives in September
likely pulled in buyers who would have waited to purchase cars,
further reducing October sales.
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
23 sales days last month, two less than in October 2007.
Bree Fowler reported from New York. AP Auto Writer Dan Strumpf
in New York also contributed to this report.
(Copyright 2008 by The Associated Press. All Rights Reserved.)