05 November, 2008

Auto Sales Worst Since 1983

Shell-shocked consumers stay away from showrooms. GM sales down by 45%, Ford off 30%, and Toyota 23%

A combination of plunging consumer confidence and shortage of credit is pushing auto sales to their lowest monthly levels since the early 1980s—and the automakers themselves to the financial breaking point.

The U.S. Big Three automakers—General Motors , Ford , and Chrysler—reported big double-digit declines in October sales: Ford was down 30%, GM off 45%, and Chrysler down 36%. Overall, auto sales were down 32%, according to Autodata. The research firm also said the annual monthly selling rate for October was 10.5 million units, down 32% from a year ago. That's the number of auto sales there would be for an entire year if every month was as bad as October. In October 2007, the annualized selling rate was 16.4 million.

"It was like somebody turned the lights off in October," said GM sales and marketing chief Mark LaNeve. According to GM, October, after adjusting according to sales per capita, was the worst month for sales in the post-World War II era. It was worse even than sales in September and October after the Sept. 11 terrorist attacks against New York and Washington in 2001. "In my 27 years in the business, I've never seen a month like this," said an exasperated LaNeve.

The declines aren't limited to U.S. brands. "The carnage was completely widespread," said GM's LaNeve. Toyota , despite huge ad spending and zero-percent financing, reported a sales drop of 23%. Nissan  was off 33%. Hyundai was down 31%. Suzuki was down 44%. Luxury makes weren't spared. Mercedes-Benz was down 26% and BMW was off 10%.