Sept.2008 Auto Sales: U.S. Monthly Sales Fall Below 1 Million

U.S. auto sales plunged to 15-year lows in September as the nation's financial crisis and tight credit kept buyers away from showrooms.

Toyota Motor Corp. fell 32 percent, for its biggest monthly decline in at least four decades. Honda Motor Co. plunged 24 percent. Ford Motor Co. posted its 10th straight monthly decline as its Ford, Lincoln and Mercury brands dropped 34 percent. General Motors was down 16 percent, and Chrysler LLC fell 33 percent.

Industry sales fell 27 percent to 965,160 light vehicles -- the first submillion sales month since January 1993. It extended the industry's slump to 11 months of falling sales compared with the previous year's results. The seasonally adjusted rate for September was 12.3 million units.

Sales are down 12.8 percent to 10.76 million vehicles for the first nine months compared with the same period last year.

"This is the toughest economy we've seen in a long time," Mark Barnes, Volkswagen Group of America COO, said in a statement.

No automaker posted a sales increase. Only Germany's Volkswagen AG and Daimler AG were able to limit their declines to less than 10 percent.

Automakers released their results as the U.S. Senate prepared to vote tonight on a revised $700 billion rescue plan to stem the worst financial crisis since the 1930s.

As the drama in Washington has played out, consumers have postponed big purchases, said Ford sales analyst George Pipas.

"There weren't many people closing on a car deal or a giant-screen TV'' two days ago, when the Dow Jones industrial average plunged 777 points after the House voted against the first bailout package, Pipas said. Hurricane Ike, which ripped through Texas on Sept. 13, also hurt demand in the nation's biggest truck market, he said.

For the year to date, Ford's sales are down 17.1 percent from 2007 levels. Its Volvo brand dropped 51.8 percent last month.

+ August.2008 Sales: Toyota, Honda and Detroit 3 Decline, Nissan Rises
+ August.2008 Sales: GM Sales 31% Up By July, But 20% Down By Last Year
+ August.2008 Sales: Mercedes Benz Down 12 Percent

GM share rises

Mark LaNeve, GM's vice president of North American sales, said strong sales of pickup trucks, employee-pricing incentives and availability of high-mileage cars such as the Chevrolet Malibu helped the automaker gain market share.

"We have at least a high-28 percent market share, maybe even a 29 percent in September," LaNeve said in a conference call for analysts and reporters. "That's our highest monthly share in three years."

Last week, GM CEO Rick Wagoner said September results would reflect the increasing toll of tighter credit availability. The industry's 11.2 percent sales drop through August was triggered primarily by buyers shunning large pickups and SUVs because of record fuel prices.

Volkswagen's September sales fell despite the introduction of the Jetta diesel, CC sedan and Routan minivan.

Demand for Hyundai vehicles decreased more than 25 percent. Its Elantra, Tiburon, Tucson, Entourage and Veracruz each fell about 50 percent from year-earlier levels. Hyundai's affiliate Kia Motors America saw a 27.8 percent decrease. Mazda North America reported a 35.6 percent decline.

'It's very difficult'

Auto dealers say some consumers with strong credit ratings are being denied loans.

"In the past, we were accustomed to financing 70 to 80 percent of our cars sold," Jim Weisbecker, general manager for Belle Glade Chevrolet in Florida, told Automotive News Tuesday, Sept. 30. "Now we finance about 20 percent, if that. It has been a drastic turnaround."

Jim Fosche, sales manager at Buddy Foster Chevrolet in Zephyrhills, Fla., said volume at his store plunged 50 percent last month. He blamed the credit crunch and job worries.
"It's very difficult," he said.

Credit restrictions also affect the ability of dealerships to keep cars on the lot because the finance arms of the Detroit 3 have tightened credit to dealerships, according to SmartMoney.com.

Incentives flat

Some of the biggest automakers resisted the urge to boost incentives in September.

"Although up overall from last year, incentive levels remained flat from August to September despite worsening economic conditions," said Jesse Toprak, Edmunds' executive director of industry analysis. "The high incentive costs of heavily discounted 2008 models are being offset by the low incentive costs of the 2009 models entering the marketplace."

According to Edmunds, Chrysler led the industry by spending an average of $4,705 per vehicle, up $101 from August. GM, Toyota, Honda and Nissan all decreased incentive spending last month.

The Senate will vote on the revised bailout package sometime after 7:30 p.m. EDT, Reuters reported. The main aim of the package remains unchanged from the measure rejected by the House two days ago -- to allow the U.S. Treasury to buy toxic mortgage-related assets from banks in a bid to unlock credit markets and head off deeper damage to the U.S. and global economies.

The contagion stemming from risky home loans has toppled Wall Street firms and frozen lending among global banks.

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