Is this a forestaste of what is to come for the UK market , given the US is 6 months ahead of us?
U.S. auto sales slumped again in September despite sales incentives and falling gas prices in what Ford Motor Co. (F) called the lowest sales month for the industry so far this year.
"Consumers and businesses are in a very fragile place," said Ford marketing chief Jim Farley.
Meanwhile, General Motors Corp. (GM) Chief Operating Officer Fritz Henderson said he expects the U.S. auto market weakness to continue into 2009 as consumers worry about credit and gasoline prices. GM said September marked its best monthly share in 2008.
"We again gained retail share, and our total market share looks to be above 27% for the month without an increase in incentives," said Mark LaNeve, GM's North America sales chief.
Ford, Toyota Motor Corp. (TM), Honda Motor Co. (HMC) and Nissan Motor Co. ( NSANY) reported declines well below expectations - 35%, 32%, 24% and 37%, respectively - while GM rode its now-expired employee-prices sales promotion to keep its decline to 16%.
George Pipas, Ford's head of industry analysis, said showroom traffic was extremely weak and sales fell off sharply in the last 10 days of September as consumers focused on the crisis on Wall Street and the debate over a bailout in Washington. Pipas said the recent developments were "tantamount to a natural disaster" in terms of the effect they have had on business.
GM sales of cars and light trucks for September dropped to 282,806. There were 24 selling days, one less than a year ago. Sales of trucks and sport-utility vehicles fell 19% while car sales declined 9.8%.
GM launched an employee-discount promotion on Aug. 20 in honor of its 100th anniversary, which stemmed sales declines that month and prompted the incentive's extension through September. Nineteen vehicles also were added to the list of eligible vehicles.
GM announced new incentives Wednesday to replace its employee-pricing program. The auto maker plans to offer discounts of up to $5,000 on some pickups and SUVs, including several 2009 models. Discounts on new models have been a rarity in the auto industry, but conditions are different this year, as consumers are slammed by plunging home values, high fuel costs and reduced availability of credit.
Toyota's fifth-straight month of sales drops shows how the Japanese giant - once considered almost immune to the economic forces that have battered its Detroit-based rivals - is now also suffering. Toyota sold 144,260 vehicles in September, compared with 213,042 a year earlier.
Toyota, which is battling GM for the crown of the world's best-selling auto maker, said passenger car sales fell 28% and SUV sales slumped 38%. Toyota division sales fell 36%, and Lexus recorded a 32% decline.
For Toyota, the last five years have seen particularly rapid sales growth, as the company expanded in the U.S. and other overseas markets. But the past 12 months have delivered more bad news for the auto industry than anyone imagined, making it difficult for Toyota and other auto makers to use emerging-market sales to offset huge U.S. losses.
As for Ford, it sold 120,355 light vehicles, down 35%. Truck and van sales fell 39%, with SUV sales tumbling 57% and F-series truck sales dropping 42%. Weak truck and SUV sales recently led Ford to push back the launch of its redesigned F-150 pickup truck that once was expected to drive the company's recovery. Ford said Wednesday the first shipments of the new F-150 will soon arrive at dealers; ridding lots of the older model is ahead of schedule, Farley said.
Honda's sales fell 24% to 96,626 from 127,200, with cars off 22% and trucks sliding 27%. Dick Colliver, Honda's executive vice president of sales, said no one has been immune to the turmoil on Wall Street, including Honda.
Chrysler's sales fell 33% - in line with declines of recent months - to 107, 349 units from 159,799. The company, which is a heavy seller of trucks and SUVs, reported a 34% drop in truck sales, while car sales declined 29%. Inventory fell 15% from a year earlier as part of a planned reduction in manufacturing and capacity.
German auto maker Daimler AG (DAI), a 19.9% stakeholder in Chrysler, has said it is in talks to sell out to Cerberus Capital Management LP, the private-equity giant that bought its 80.1% Chrysler stake a year ago.
Meanwhile, Japan's Nissan posted a 37% September drop to 59,565 vehicles from 94,269 a year ago. Car sales fell 34%, while truck sales tumbled 42%.
There is hope that falling oil prices will help boost auto sales, notably pickup trucks and SUVs, and a $25 billion low-interest loan program approved by President Bush on Tuesday also has given some hope to auto makers. The loans are meant to accelerate the development of fuel-efficient vehicles and are expected to principally benefit GM, Ford and Chrysler. The loans could save the auto makers hundreds of millions of dollars and could make bankruptcy less likely.
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