US auto sales plunge whopping 36% in Dec
Huge rebates and zero-per cent loans couldn't overcome economic uncertainty as US auto sales plunged 36 per cent in December, capping a dismal year that saw sales free-fall by 2.9 million vehicles from 2007.
The bleak numbers, according to both industry officials and analysts, mean that record high rebates and low-interest financing deals will 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.
One automaker, Hyundai Motor America, is trying to woo skittish buyers by promising to let them return cars for up to a year if they lose their jobs and can't make the payments.
Similar bold moves might be necessary throughout the year.
Every major manufacturer reported drops of more than 30 per cent in December. Leading the largest year-over-year drop since the Arab oil embargo days of 1973-74 was struggling Chrysler LLC, which sold 53 per cent fewer vehicles than last December and 30 per cent fewer in 2008 than in 2007.
General Motors Corp. sold 2.9 million vehicles last year, the lowest number in 49 years.
US auto sales tumbled to 13.2 million in 2008, down 18 per cent from 16.1 million in 2007. Consulting firm IHS Global Insight predicts that US sales will drop to 10.3 million this year as the economy continues to sputter.
Automakers were reluctant to predict when a recovery might occur, but most were pessimistic about the first quarter. After that, some were hopeful that President-elect Barack Obama's stimulus package would kick in, coupled with a loosening of credit that could bring people back to the showrooms.
Even Toyota Motor Corp. and Honda Motor Co., which earlier in the year had seen increases, saw declines in December that were larger than their US-based competitors'. Toyota was down 37 per cent and Honda 35 per cent, compared with Ford Motor Co.'s 32 per cent drop and GM's 31 per cent slide. Nissan Motor Co. sales also dropped 31 per cent.
Ford's sales for 2008 fell 21 per cent from a year earlier, keeping the Dearborn automaker in third place in the US auto sales race behind GM and Toyota for the second straight year.