How things shook out: sales were down 37% at Toyota, 35% at Honda, and 32% at the Ford Motor Company. General Motors (GM) and Nissan reported 31% declines over the same period a year ago. Chrysler, which along with General Motors received a $4 billion loan from the federal government at the end of December to help them remain solvent, is expected to report a decrease of at least 40% in the next few days.
Other manufacturers were not immune to the slump. BMW said its sales were down 36% last month, while Volkswagen sales fell 14%. Even Mercedes took a hit—sales fell 24% in December, the company reported.
No surprise, then, that most manufacturers reported sales declines for 2008 in general, with declines ranging from the high single digits to 15–20%. Overall, analysts say 2008 will end up as the worst year for selling cars and trucks since 1992.
Few Bright Spots
Ford estimated that its market share increased to 14.6% in December, up 0.7% of a point from a year ago. It marks the first time in 11 years that Ford’s market share rose, on a year-over-year basis, for three consecutive months. In addition, the Ford F-series pickup appears to have maintained its position as the best-selling model in the United States for a 27th consecutive year, despite surging demand for small cars such as the Honda Civic and Toyota Corolla.
GM also cited some positive factors amidst the gloom impacting the industry. While its dealers in the United States delivered 221,983 vehicles in December—down 31% compared with a year ago—the company noted that total deliveries were 67,000 units higher than November's result—up more than 43% month over month.
"Given the ongoing challenges and the difficult market environment, we were very encouraged to see a volume rebound for GM in December compared with both October and November," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing. "We are building more vehicles than ever that provide great value and Americans enjoy owning. That is why, for the year, we are seeing our market share holding steady at just above 22%. That's five percentage points more and 760,000 vehicles more than our nearest competitor.”
Despite the weak market in December, Chevrolet Malibu continued its solid performance with total sales up 43% compared with last December. For 2008, Malibu sales of more than 178,000 vehicles were up 39%, making it the highest percentage gainer in the top 20 vehicles sold in America with a volume increase compared with 2007.
According to LaNeve, GM's cars, trucks, and crossovers are enabling the company to hold the leadership position in a very difficult market. Specifically, he reports the company’s signature “Red Tag Event was well-received, and the ability to offer some 0% financing through our partner GMAC in the last week of the month also helped."
That financing aspect is proving to be particularly critical as it goes to the heart of the sales slump: while many consumers are willing to make vehicle purchases, they are facing tighter credit conditions and, therefore, extremely limited financing options. Realizing this challenge, GM is looking to move fast. In fact, the day after the company received $6 billion in capital from the federal government, GMAC began aggressively trying to draw consumers back into dealerships. GMAC said it would begin making loans immediately to borrowers with credit scores of 621 or higher, a significant easing from the 700 minimum score the company started requiring two months ago as it struggled to stay afloat.
Source: New York Times, BusinessWeek, General Motors