Ford and General Motors dragged the domestic auto industry to its 10th straight monthly sales decline last month as consumers continued...
Ford and General Motors dragged the domestic auto industry to its 10th straight monthly sales decline last month as consumers continued to snub trucks because of gasoline prices.
A weak U.S. economy, falling home values and gasoline prices near $4 a gallon combined to drop industrywide sales 16 percent, and analysts said they saw little prospect for relief. Hardest hit have been the pickups and sport-utility vehicles that account for most of the volume at money-losing GM, Ford and Chrysler.
“I don’t think we’ve seen the worst,” said John Casesa, managing partner of Casesa Shapiro Group in New York, in a Bloomberg television interview. “This has been a long, dismal story, and macro conditions are as bad as they get for the auto industry.”
Although nearly every big automaker saw U.S. sales drop last month, many say they are seeing signs the worst slump in recent history may have bottomed out.
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Most upbeat were executives from GM, which posted a 20.3 percent sales drop from a year ago but a 31 percent improvement over July’s dismal totals.
Much of the gain came from offering all buyers employee discounts on many models, but Mark LaNeve, GM’s vice president of North American sales, said there’s hope that June and July were the trough for U.S. sales.
“We are very encouraged by what we saw in August. It gives us reason to think that we are starting to pull our way out of this,” he said Wednesday in a conference call with reporters and industry analysts.
Chrysler said its U.S. sales fell more than 34 percent last month, while Ford reported a 26.5 percent decline. Toyota’s sales dipped 9.4 percent, and Honda saw a 7.3 percent slide.
“Maybe towards the end of ’09, going into 2010, there’ll start to be some signs of recovery,” said Chrysler President Jim Press in Los Angeles. He said consumers’ inability to get access to credit is a bigger threat to sales than gasoline prices.
Nissan was the only major automaker to report an increase over August 2007: Its sales climbed 13.6 percent.
Ford trailed Toyota by more than 55,000 vehicles in posting its 21st decline in the last 22 months. SUV sales at its main Ford, Lincoln and Mercury brands fell 53 percent, while pickups and vans plummeted 39 percent.
The F-series pickup, the best-selling vehicle in the U.S. for 26 years, dropped 42 percent in August.
“We’re actually moving through an automotive recession,” said Erich Merkle, an analyst for consulting firm Crowe Chizek. “Very few people in the United States buy a car because they have to, they buy it because they want to, and right now we’re seeing people just delay that purchase.”
But the increase over July buoyed most automakers, with sales executives saying that lower fuel prices were starting to ease consumers’ minds. They also reported the market shifting a little bit back toward trucks and sport-utility vehicles, driven by incentives and lower gas prices.
Gasoline prices have declined from the $4.11-a-gallon record set July 15, leading some analysts to predict that consumers would consider big trucks again. The average price at U.S. pumps for the month was $3.76, according to motorist group AAA.
“The panic shopper — the customer that saw fuel prices spiking, and rushed out to buy a fuel-efficient vehicle — is no longer in the market now that fuel prices have stabilized,” said Steven Jaros, an assistant vice president for Honda.
Employee pricing, low-interest financing and other incentives pulled buyers off the fence and into the market last month and raised truck sales, said Jesse Toprak, executive director of industry analysis for the automotive-information site Edmunds.com.
Many buyers have postponed purchases for the past year, so GM may not see a decline in coming months, he said. Toprak predicted month-over-month sales improvements for the rest of the year, but sales still below last year’s levels.
“I think this is the bottom,” he said. “I think that we are going to start seeing some steady improvement from here on.”
Information from Bloomberg News and The Associated Press is included in this report.