US Auto Sales Hit Multi-Year Lows In October

U.S. auto sales slumped in October, with General Motors Corp. (GM) reporting its first month of less than 200,000 sales since at least the 1970s, as slumping consumer confidence and the worsening credit crunch kept buyers away from showrooms.

Mark LaNeve, GM's North America sales chief, said Monday that, adjusted for population growth, October's industrywide sales were probably the worst since World War II.

A drop in personal spending tied to economic problems and the credit crunch kept buyers out of U.S. showrooms for much of the month, despite auto makers boosting incentives to spur sales and gas prices fell to a nationwide average of about $2.65 a gallon. In the last two weeks, however, some buyers started to snap up bargain-priced gas-guzzling pickups and sport-utility vehicles.

But that didn't help the nation's biggest auto makers very much. GM's October sales plunged 45%, Ford Motor Co. (F) recorded a 30% drop, Toyota Motor Corp. (TM) reported a 23% decline and Chrysler LLC sales fell 35%.

GM, the struggling No. 1 U.S. auto maker, reported light-vehicle sales of 168,719. There were 27 selling days in October -- one more than a year earlier. Spokesman John McDonald recently said that GM's sales hadn't been below 200,000 on a monthly basis since at least 1975, and may not have breached that level in any month since the 1940s.

GM car sales fell 34% while light trucks slid 51%.

"We believe there is considerable pent-up demand from the last three years, but until the credit markets open up and consumer confidence improves, the entire U.S. economy -- and any industry like autos that relies on financing -- will suffer," said LaNeve. He added, "These are extraordinary times for the U.S. economy, for consumers and for an auto industry that is running at deep recessionary levels relative to 1999-2006."

LaNeve said GM -- and the auto industry -- can't bounce back without "a coordinated national effort to turn this economy around."

GM, like other auto makers, has been forced to rely more on costly incentive programs to entice wary customers as U.S. auto sales sink to their slowest pace since the early 1990s.

On Monday, GM announced new $2,000 discounts to customers who own one GM vehicle and another car or truck made by a competing auto maker. It also said it would start its annual year-end sale early, on Tuesday, rather than in mid-November, as is customary. Chrysler is continuing programs unveiled in October, including cash rebates up to $6,000 and discounted financing.

With its financial condition deteriorating, GM is exploring a possible merger with Chrysler and has been in discussions for weeks with Chrysler's owner, Cerberus Capital Management LP. Chrysler has been struggling mightily, with sales of 94,530 -- a decline partly attributed to declining fleet sales.

Meanwhile, Toyota reported light-vehicle sales of 152,101, marking its sixth-straight month of declines and reflecting how the once-immune Japanese giant has been suffering from the same forces that have battered its Detroit rivals.

Toyota, which is pulling away from GM in the battle for the crown of the world's best-selling auto maker, said passenger car sales fell 15% while SUV sales slumped 29% and light trucks dropped 34%.

Ford's total of 132,248 came as Ford, Lincoln and Mercury car sales dropped 27%. Truck and van sales fell 19%, with SUV sales tumbling 54% and F-series truck sales dropping 16%. Some 3,000 of the 2009 models were sold last month as the vehicles begin their rollout to showrooms.

Sales of the Edge "crossover" vehicle -- designed to buffer Ford against the SUV decline -- fell 39%. The car-based wagon -- designed to look and function like an SUV but boasting modestly better fuel economy -- has seen waning demand as consumers flock to cars that are less expensive and more efficient.

The Focus, a hot-selling small car, saw an 18% decrease. Ford sales analyst George Pipas had said recently that small cars were on track to have the highest share of the October market, accounting for 23% of overall U.S. sales. October was also poised to mark the first time since 2000 that passenger cars and crossovers outsell pickups and SUVs.

At the smaller Japanese auto makers, Honda Motor Co.'s (HMC) U.S. sales dropped 25% to 85,864 as cars declined 22% and trucks slumped 29%. Its two strongest vehicles, the Accord and Camry cars, recorded decreases of 36% and 22%, respectively.

Nissan Motor Co. (NSANY) said sales fell 34% to 49,833, with trucks plunging 76% and cars falling 15%. Most of the auto makers' shares were lower in late-afternoon trading. GM shares were down 4.3% to $5.54, Ford was off 1.8% to $2.15, Honda is off 1.3% to $24.46 and Nissan is down 5 cents to $9.56. Toyota shares, however, are up 3 cents at $76.12.

Source : Dow Jones Newswires