2nd UPDATE: US Auto Sales Slump Again, Capping Woeful 2008
Monday January 5th, 2009 / 21h38
(Updates with Chrysler sales and fresh stock prices)
DOW JONES NEWSWIRES
The U.S. auto industry closed out its worst year in more than a decade as automakers reported sales slumped 31% or more in December - the fourth-straight month of such declines.
The grim numbers underscore how matters went from bad to worse for automakers last year as jittery consumers stayed out of showrooms. Those woes are expected result in even lower sales for 2009, with automakers expected to ratchet back incentives starting in the spring and financing remaining tighter than had been the norm.
But because some of the results weren't as bad as some analysts feared, shares of General Motors Corp. (GM) and Ford Motor Co. (F) were solidly higher in a down day in general for stocks. Ahead of the close, Ford was up 4.5% at $2.57 while GM added 3% to $3.76. American depositary shares of Honda dropped 2.1% to $21.36 and Toyota fell 0.7% to $65.90.
Ford's senior economist, Emily Kolinski Morris, said the existence of a government stimulus package is a key factor supporting a second-half recovery for the industry. She added the first quarter was going to be "bad, no matter how you look at it."
GM, the nation's largest auto maker, sold 220,030 light vehicles in December, down 31%, as car sales dropped 25% and light trucks fell 35%. There were 26 selling days, the same as a year earlier.
Inventory, which became bloated in recent years as consumers turned away from the larger pickup trucks and sport utility vehicles to embrace smaller, more fuel-efficient vehicles, dropped 4%.
GM's U.S. light-vehicle sales for the year fell 23% to 2.95 million.
Amid the miserable sales environment, GM and other automakers have been cutting production. GM said it now expects first-quarter production of 420,000 vehicles, down 53% from a year ago, and 180,000 fewer vehicles than its previous forecast. In mid-December, GM said it would idle about 30% of its North American assembly plant volume and cut first-quarter production by about 250,000 vehicles because of slumping sales.
At Toyota, December sales fell 37% to 141,949, the eighth-straight month of sales drops for the nation's second-largest automaker, which had once consistently defied the negative sales trends that have slammed Detroit.
Owing to the global economic slowdown, the world's largest automaker recently announced it would suffer its first operating loss in 70 years and is postponing the completion of a new assembly plant in Mississippi and cutting production at several U.S. factories and other overseas markets. The company's U.S. sales decline for the year was 16% to 2.22 million.
Ford took an optimistic view of December's results, noting that its December market share rose to 14.6%, up 0.7 percentage point from a year ago - the first time since 1997 it had achieved a market share increase for three straight months.
"This is a strong ending to ... a very challenging year," said marketing chief Jim Farley. Ford projected a fourth-quarter 15% market share for Ford, Lincoln and Mercury - beating the year-ago figure for the first time since 2001, it said.
Ford, the No. 3 U.S. auto maker by sales behind GM and Toyota, said it sold 138,325 light vehicles in December, down 32%. Retail sales for the Ford, Lincoln and Mercury brands fell 27%, while lower-margin fleet sales dropped 42%, including a 57% decline in daily rental sales.
For 2008, Ford's sales fell 21% to 1.98 million vehicles.
Meanwhile, Honda's December sales slid 35% to 86,085, putting the year's total down 8.2% at 1.43 million. Nissan Motor Co. Ltd. (NSANY) posted a 31% decline for the month to 62,102 as 2008 sales dropped 11% to 951,350.
Chrysler reported a 53% plunge to 89,813 amid a 63% cut in fleet sales. Total sales for the year dropped 30% to 1.45 million.
-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com
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