Although Chrysler attributed its sales drop to the company reducing sales to low-margin fleet buyers such as rental car companies, automakers are not ready to predict when business might pick up, after U.S. auto sales tumbled 18 percent in 2008. GM had its worst year in nearly a half-century, according to the Associated Press. With demand low because of a terrible economic outlook and growing job worries, record high rebates and low-interest financing deals could stick around until at least February. But those deals will likely disappear as the remaining 2008 models are sold and inventories are lowered to match demand.
Automakers are resorting to some bold moves. Hyundai Motor America is promising to let buyers return cars for up to a year if they lose their jobs and can’t make the payments. Toyota Motor Corp. is suspending production at all 12 of its Japan plants for 11 days over February and March.
Toyota spokesman Hideaki Homma said demand in the world auto market is so depressed that every model is falling sharply in sales.
U.S. sales fell to 13.2 million in 2008, down 18 percent from 16.1 million in 2007. Consulting firm IHS Global Insight predicts that U.S. sales will drop to 10.3 million this year as the economy continues to sputter. Most automakers were pessimistic about the first quarter outlook. After that, some were hopeful that President-elect Barack Obama’s stimulus package and a loosening of credit could bring an improvement.
December was particularly bleak. Chrysler LLC sold 53 percent fewer vehicles than last December and 30 percent fewer in 2008 than in 2007. GM’s sales of 2.9 million vehicles last year were the lowest number in 49 years, the Associated Press reported.
Even Toyota and Honda Motor Co., which earlier in the year had seen increases, saw declines in December that were larger than their U.S.-based competitors. Toyota was down 37 percent and Honda 35 percent, compared with Ford Motor Co.’s 32 percent drop and GM's 31 percent slide. Nissan Motor Co. sales also dropped 31 percent.
Ford’s sales for 2008 fell 21 percent from a year earlier, keeping it in third place in the U.S. auto sales race behind GM and Toyota for the second straight year.