US auto sales drop 41pc to lowest level since 1981
Thursday, 5 March 2009
CHICAGO, Mar 4 (AFP): US auto sales extended their downward spiral in February, falling 41 per cent to the lowest rate since December 1981 amid a deepening economic crisis, industry data showed yesterday.
"We are in an automotive depression that is being exacerbated by 'The Great Recession,' as shell-shocked consumers, fearful for their jobs, the value of their homes and stock market assets, are wary of making the sizable discretionary investment in purchasing new vehicles," Standard & Poor's Equity Research analyst Efraim Levy wrote in a research note.
"We do not foresee an uptick in industry demand before the fourth quarter of 2009 at the earliest."
Total US light vehicle sales came in at 688,909 units in February, which translates into a seasonally adjusted annualized rate of 9.12 million vehicles compared with a rate of 15.36 million in February 2008, according to Autodata.
That's also down from January's rate of 9.57 million vehicles and December's rate of 10.31 million units, according to Autodata.
While actual deliveries were up 4.9 per cent compared with January, the decline reflects the fact that February is typically a much bigger sales month.
"This will be the lowest February on record going back some 42 years to 1967," said Mike DiGiovanni, head of industry analysis at General Motors.
GM posted the sharpest year-on-year decline among major automakers, with sales down 53 per cent to 127,296 vehicles in February and its market share down to 18.2 per cent from 22.7 per cent a year earlier.
The largest US automaker, which last month asked the US Treasury for an additional 16.6 billion dollars in emergency loans on top of the 13.4 billion dollars approved in December, announced plans to slash second quarter production by 34 per cent.
"This remains a very challenged industry that is a reflection of the severe economic crisis we're in," DiGiovanni said in a conference call.
"These are obviously unsustainable levels which are causing almost every major automaker across the globe to ask for government aid."
Ford, which has said it has sufficient cash reserves to survive the downturn without government aid, saw sales plummet by 48 per cent to 96,044 vehicles in February and its market share slip to 13.9 per cent from 15.7 in February 2008.
It announced plans to slash second quarter production by nearly 40 per cent to 425,000 vehicles from 685,000 vehicles in the second quarter of 2008.
"It may be that this month represents the bottom but there is no economic anchor to allow us to make that call definitively," Ford economist Emily Kolinksi Morris said in a conference call.
Chrysler, which recently asked the US Treasury for another five billion dollars in loans to supplement the four billion it received in January, also posted sharp losses on a year-over-year comparison-down 44 at 84,050 vehicles.
But Chrysler managed to increase its share of the US market to 12.2 per cent in February from 9.5 per cent in January, according to Autodata.
"It could show maybe we're at the bottom of the bathtub," said Chrysler president and vice chairman Jim Press.
"By working together with our strong dealer body, we will continue to move the needle on sales and service."
Chrysler appears to have won a large chunk of that market share from Toyota, which saw its share drop to 15.9 per cent in February from 17.9 per cent, according to Autodata.
The Japanese automaker reported its sales fell 37 per cent on a year-over- year comparison to 109,583 vehicles but said it would not need to make any more significant production cuts at its US facilities on top of those made earlier this year.
While Toyota does not expect a significant recovery in auto sales this year, it is "still optimistic that we'll pull off the bottom" sometime this summer said Bob Carter, general manager of the Toyota Division for Toyota Motors Sales USA.
Korea's Hyundai Motor managed to increase its share to 4.4 per cent of the US market compared with 2.6 per cent in February of 2008 with the help of an innovative incentive program which allows customers to return their vehicle or get three months of loan payments if they lose their job.
Hyundai's sales were significantly ahead of the average, down only 2.6 per cent to 30,621 vehicles when compared with February of last year.
"We are in an automotive depression that is being exacerbated by 'The Great Recession,' as shell-shocked consumers, fearful for their jobs, the value of their homes and stock market assets, are wary of making the sizable discretionary investment in purchasing new vehicles," Standard & Poor's Equity Research analyst Efraim Levy wrote in a research note.
"We do not foresee an uptick in industry demand before the fourth quarter of 2009 at the earliest."
Total US light vehicle sales came in at 688,909 units in February, which translates into a seasonally adjusted annualized rate of 9.12 million vehicles compared with a rate of 15.36 million in February 2008, according to Autodata.
That's also down from January's rate of 9.57 million vehicles and December's rate of 10.31 million units, according to Autodata.
While actual deliveries were up 4.9 per cent compared with January, the decline reflects the fact that February is typically a much bigger sales month.
"This will be the lowest February on record going back some 42 years to 1967," said Mike DiGiovanni, head of industry analysis at General Motors.
GM posted the sharpest year-on-year decline among major automakers, with sales down 53 per cent to 127,296 vehicles in February and its market share down to 18.2 per cent from 22.7 per cent a year earlier.
The largest US automaker, which last month asked the US Treasury for an additional 16.6 billion dollars in emergency loans on top of the 13.4 billion dollars approved in December, announced plans to slash second quarter production by 34 per cent.
"This remains a very challenged industry that is a reflection of the severe economic crisis we're in," DiGiovanni said in a conference call.
"These are obviously unsustainable levels which are causing almost every major automaker across the globe to ask for government aid."
Ford, which has said it has sufficient cash reserves to survive the downturn without government aid, saw sales plummet by 48 per cent to 96,044 vehicles in February and its market share slip to 13.9 per cent from 15.7 in February 2008.
It announced plans to slash second quarter production by nearly 40 per cent to 425,000 vehicles from 685,000 vehicles in the second quarter of 2008.
"It may be that this month represents the bottom but there is no economic anchor to allow us to make that call definitively," Ford economist Emily Kolinksi Morris said in a conference call.
Chrysler, which recently asked the US Treasury for another five billion dollars in loans to supplement the four billion it received in January, also posted sharp losses on a year-over-year comparison-down 44 at 84,050 vehicles.
But Chrysler managed to increase its share of the US market to 12.2 per cent in February from 9.5 per cent in January, according to Autodata.
"It could show maybe we're at the bottom of the bathtub," said Chrysler president and vice chairman Jim Press.
"By working together with our strong dealer body, we will continue to move the needle on sales and service."
Chrysler appears to have won a large chunk of that market share from Toyota, which saw its share drop to 15.9 per cent in February from 17.9 per cent, according to Autodata.
The Japanese automaker reported its sales fell 37 per cent on a year-over- year comparison to 109,583 vehicles but said it would not need to make any more significant production cuts at its US facilities on top of those made earlier this year.
While Toyota does not expect a significant recovery in auto sales this year, it is "still optimistic that we'll pull off the bottom" sometime this summer said Bob Carter, general manager of the Toyota Division for Toyota Motors Sales USA.
Korea's Hyundai Motor managed to increase its share to 4.4 per cent of the US market compared with 2.6 per cent in February of 2008 with the help of an innovative incentive program which allows customers to return their vehicle or get three months of loan payments if they lose their job.
Hyundai's sales were significantly ahead of the average, down only 2.6 per cent to 30,621 vehicles when compared with February of last year.