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U.S. Auto Makers feel the crunch. |
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It comes as no surprise to me that the general public are hanging on to their money in this nightmare known as the credit crunch. We all feel it, however General Motors executives were stunned at the size of the drop in U.S. auto sales in October, to the lowest annual sales rate in 25 years, as low consumer confidence kept us all at home.
Mark LaNeve, vice president, GM North America vehicle sales, service and marketing said,
“In my 27 years in the business, I never saw a month like this.” He said that adjusted for population, per-capita U.S. auto sales in October were the worst in the post-World War II era.
According to AutoData Corp U.S. sales fell to 838,156 in October, down 31.9 percent from the year-ago. Sales in September made headlines for being the first month since the recession of 1991, that monthly auto sales fell below 1 million. For sales to fall below 900,000 the following month is a bleak sign.
AutoData said the Seasonally Adjusted Annual Sales rate in October was only about 10.6 million units, the lowest since February 1983. In the month of October 2007, the Seasonally Adjusted Annual Sales rate was about 16 million units.
LaNeve said,“The carnage was completely widespread.” GM sales fell 41.5% from a year-ago; Ford, down 30.2 %; Chrysler, down 34.9 %; Toyota, down 23 %; Honda, down 25.2 %; Nissan, down 33 %.
“Most of our big dealers have multiple franchises, including imports,” said LaNeve. “When I spoke with dealers this past month, nobody told me they were having a good month. Everybody was down 25 to 50 percent. It was like somebody turned out the lights in the month of October,” he said.
LaNeve acknowledged he’s usually among the most upbeat, optimistic auto industry executives, but in a Nov. 3 conference call, he said he couldn’t summon his usual optimism. “This is serious stuff,” he said.
“We’ve been hoping that with the bailout package, hopefully we would have a normal downturn, a mild recession. Now what’s happened is, it’s affected the real economy more than we thought. We’re much more concerned than we were a month ago,” LaNeve said.
That’s bad, because a month ago, LaNeve said that before the present downturn, September sales would have made him jump out a window. In September, GM sales were down 15.6 percent, according to AutoData.
“This is clearly a severe, severe automotive recession,” said Mike DiGiovanni, GM executive director, global market and industry analysis. “This is something we really can’t sustain.”
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