U.S. Auto Sales Stuck in the Shop

U.S. auto sales continued to plummet in December, as a faltering economy kept would-be consumers out of the nation’s showrooms.General Motors last month posted a 31 percent drop in sales, shifting 221,983 cars and trucks, while closing out the year having shifted 2.98 million vehicles. GM’s 2008 total represents a 23 percent drop from the prior year’s sales of 3.98 million units.While GM’s yearly performance was its worst since 1959, the automaker saw a marked improvement with at least one model, as sales of the Chevrolet Malibu were up 43 percent in 2008.Decreased consumer spending also had a significant impact on Ford Motor and Chrysler. Ford’s domestic sales fell to a 47-year low, as the company sold 1.98 million vehicles in 2008, a year-over-year decline of 21 percent. Chrysler sales plunged 30 percent, as total U.S. deliveries for the year reached just 1.45 million units.In December, Ford sales fell 32 percent, while Chrysler endured a 53 percent nosedive.The Big Three hasn’t suffered in a vacuum, as Toyota Motor sales were off 15 percent in 2008, to 2.22 million vehicles, while Honda Motor dropped 8 percent to 1.42 million cars and trucks. In fact, 2008 marked the first yearly decline in U.S. sales for Toyota since 1995. The same holds true for Honda, which previously had enjoyed a streak of year-over-year sales growth going back to year one of the first Clinton administration.Preliminary figures now put total U.S. sales at around 13 million units, down nearly 19 percent versus a year ago (16.1 million). If the numbers hold, 2008 will mark the year Americans made the fewest new-car purchases since 1992.As supplied by the individual car companies, the yearly sales tallies come as U.S. unemployment claims have reached a 26-year high and the economy heads into the second year of a recession. Even before Detroit’s annus horribilis, automotive ad spending has been on the decline since 2005. The third quarter of last year marked the 13th consecutive quarter in which auto expenditures dropped versus the year-ago period, although the category remains the biggest investor in measured media. In the first nine months of last year, ad spend cutbacks were more pronounced for the domestic segment, down 18.9 percent to $4.11 billion, versus a decrease of 7.4 percent in import spend ($5.96 billion).Until consumer confidence returns to its hale-and-hearty prerecession levels, the auto industry will continue to suffer. Many observers are holding out hope that President-elect Barack Obama’s $675-775 billion economic stimulus package will have a profound and bracing effect on American spending habits. “The sooner stimulus efforts find their way to where they’ll do the most good––into the hands of consumers––the sooner we’ll see a turnaround in confidence levels and a return of buyers to the marketplace,” said Jim Lentz, president of Toyota’s U.S. sales unit.

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U.S. Auto Sales Stuck in the Shop

Anthony Crupi

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Anthony Crupi