[US] Auto sales hit new lows; GM sales plunge 41 pct.

[Spectre]

From: http://apnews.myway.com/article/20081202/D94QOLN80.html

General Motors' November U.S. sales plunged 41 percent, while Ford's dropped 31 percent, dashing hopes that the industrywide drop in vehicle demand might be easing as Detroit's automakers prepare to state their second case for a federal bailout.

Their overseas rivals posted abismal results as well. Toyota's November sales tumbled 34 percent, and Honda's fell 32 percent.

A dreary economy, swooning consumer confidence and tight credit markets have combined to keep consumers out of vehicle showrooms this year. On Monday, the National Bureau of Economic Research said the U.S. entered a recession in December 2007, much earlier than most predictions.

October's seasonally adjusted annual sales rate of 10.6 million vehicles was worst in more than 25 years and far below the rate of 16 million a year earlier, according to Autodata Corp.

Many analysts had expected November sales to come in slightly better, noting that aggressive incentive spending and the plunge in gasoline prices may have put a floor under sales. But GM, Ford, Toyota and Honda Motor Co. (HMC) all posted month-over-month sales declines, pointing to a potential industrywide drop.

Detroit-based General Motors Corp. (GM) reported a 44 percent drop in demand for cars, while light truck sales dropped 39 percent.

"In November we saw the continuation of the dramatic decline in volume for the industry," Mark LaNeve, GM's vice president of North American sales, said in a statement released by the company. "Every manufacturer is posting awful numbers and we are no exception."

Jim Farley, Ford Motor Co. (F)'s group vice president of marketing, said he expects the industry to post continued year-over-year decines in auto sales until at least the second half of 2009.

"We could see some strengthening in the second half of next year, or at least some stabilization, albeit at a much lower level," Farley said in a conference call with analysts and reporters.

Farley said sales began the month at an improved rate but began skidding around mid-month, coinciding with the Detroit Three's presentation to Congress for $25 billion in loans. But he cautioned that numerous factors worked together to hobble sales.

"The talk of the bailouts and the bankruptcies and all the uncertainty and job loss has obviously done little to bolster consumer confidence," Farley said.

Dearborn, Mich.-based Ford said light truck sales for its namesake brand, Lincoln and Mercury were off 29 percent compared with November 2007, while the three brands' car sales were down 32 percent.

Toyota Motor Corp. (TM), Japan's No. 1 automaker, said truck sales plummeted 36 percent, while demand for passenger cars fell 32 percent, despite the automaker's extension of zero-percent financing on a dozen vehicles through the end of the month.

Toward the end of the month, Ford also announced offers of employee pricing, zero-percent financing and cash incentives on a variety of its vehicles in a move to offset one of the worst sales declines in the industry's history.

Automakers' sales reports are coming in the same day the U.S.-based automakers were scheduled to present plans to Congress for how they expect to return to profitability. Ford, GM and Chrysler LLC will go before lawmakers this week to ask a second time for a combined $25 billion federal loan to stave off bankruptcy.

Concessions are also expected from the United Auto Workers Union. UAW leaders from across the U.S. planned to hold an emergency meeting in Detroit on Wednesday to discuss concessions the union could make to help the companies get loans.

GM shares traded in positive territory most of Tuesday morning but fell 31 cents, or 6.8 percent, to $4.28 after its sales report. Ford shares rose 5 cents, or 2 percent, to $2.60 in afternoon trading, while Toyota's U.S. shares rose $1.76, or 3 percent, to $60.32, and Honda gained 44 cents, or 2.2 percent, to $20.38.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 25 sales days last month, the same as in November 2007.

No, the crappy spelling isn't mine. Typical US Big Media piece - poor quality.

Looks like the entire industry is down... but it looks like the market is also rejecting the lame excuses that the Big Three are giving as well as the bailout.

[_HighVoltage_]

Just a thought - I think it's normal for the numbers to decrease like that. There is a finite number of people in America and they don't buy a new car EVERY month.
I may be wrong, but the average lifecycle of cars is around 10 years (maybe more, maybe less)

My point is, if somebody has bought a 2006 model, you can't expect that person to replace it with a new car just 2 years after.
Am I right?

[MacGuffin]

Well, the need for individual transport remains. So car sales will eventually rise again. No doubt about that.

The problem the "Big Three" are having, is that they are in no shape to weather out the crisis - unlike almost all of their competitors - and even if they somehow manage to survive the crisis, they are still unfit for the future...

I think the situation is rather hopeless and it would need more than one miracle to save them in their current state.

[nist7]

Originally Posted by MacGuffin

Well, the need for individual transport remains. So car sales will eventually rise again. No doubt about that.

Eventually.

People do need cars, but how many in this economy will buy a brand new car? I'm guessing that alot of the people who were considering a brand new car are now turning to slightly used cars or even not buying one at all since cars these days last for quite a while.

[Spectre]

Originally Posted by _HighVoltage_

Just a thought - I think it's normal for the numbers to decrease like that. There is a finite number of people in America and they don't buy a new car EVERY month.
I may be wrong, but the average lifecycle of cars is around 10 years (maybe more, maybe less)

My point is, if somebody has bought a 2006 model, you can't expect that person to replace it with a new car just 2 years after.
Am I right?

The traditional lifecycle of new cars in the US was 5 years - after 5 years, people would trade them back in or sell them off, then get a new one. Much of this was due to the perception, based in reality, that the domestic car you'd bought wouldn't remain trouble free for much longer than that.

Recent studies show that people have been keeping cars longer of late, 8-10 years now. This has been attributed to the reliability of the import marques and the reputation of same entering the collective consciousness. Of course, it's a problem for the domestic makes, as their cars *won't* last that time. When an 87 Jaguar XJ6, never a paragon of build quality or reliability can make the run to 250K with only a few problems and a fifteen years newer GM car can't, there's a problem. People will notice this and buy accordingly.

[Hiro11]

1. People can't get credit these days. GMAC is only offering credit to people with FICO scores higher than 700, for example. Very few people buy cars without some kind of credit.

2. People are genuinely poorer in general due to their investment portfolios nosediving. They also perceive risk and "feel" poorer. It's not seen as a good time to be buying a car.

3. As mentioned above, cars last longer these days. People blew a lot of money buying new cars they didn't need in the past few years. Unnecessary spending is the first thing to go when people feel the pinch.

4. Lots of people are concerned about the long term viability of GM, Ford and Chrysler. Does it make sense to buy a car from a company that might not be around in a year or two?

...etc.

[Hiro11]

Originally Posted by MacGuffin

The problem the "Big Three" are having, is that they are in no shape to weather out the crisis - unlike almost all of their competitors - and even if they somehow manage to survive the crisis, they are still unfit for the future...

I don't think so, the problem is hardly limited to the big three.

As the figures note, Honda, Nissan and Toyota actually went down more than Ford in month-on-month US sales.

BMW is getting absolutely clobbered right now, they're saying it's the biggest crisis they've ever faced.

Fiat is saying 2009 profits will be down 65%.

Nissan/Renault just cut their 08 forecasted profit in half, sales are down for the company by 49%. They're in big trouble and have been for a while now.

Honda and Toyota will probably be OK in the long run, but lots of other manufacturers are close to being in as bad shape as the big three.

[Mischief007]

Heard some rumours that Honda and Toyota might be getting bailouts from their respective governments as well.

[Dogbert]

Originally Posted by Mischief007

Heard some rumours that Honda and Toyota might be getting bailouts from their respective governments as well.

Super highly unlikely. Honda, in fact, just opened up another plant in Indiana. They support bailing out GM et al., though; they need the parts suppliers that a bailout would affect.

[Mischief007]

Originally Posted by Dogbert

Super highly unlikely. Honda, in fact, just opened up another plant in Indiana. They support bailing out GM et al., though; they need the parts suppliers that a bailout would affect.

I know no other auto company wants them to go under because exactly of what you said. Parts suppliers. I'll see if I can dig that rumoured article up just to throw some gasoline on the fire.

I work at an auto plant that produces the Equinox and Torrent BUT GM doesn't own the plant. They just pay for the vehicle that we produce and that's all. We do have about 7 to 10 suppliers and even with a Toyota plant just 15 minutes down the road, the suppliers would hurt massively if our plant would close.

[NooDle]

Happy now Spectre?

[Spectre]

Originally Posted by NooDle

Happy now Spectre?

Nah, I gotta work off some more of that "Spectre is a nice guy" thing that marcos_eirik stuck me with.

[Karoug]

^Too late! We already know you are a big cuddly bear that just wants to be hugged!!