U.S. Auto Sales Post Worst Year Since 1992

By Mike Caggeso
Associate Editor
Money Morning

Total U.S. auto sales last year hit a 16-year low as the world's major carmakers racked alarmingly high double-digit sales drops in the recession-plagued United States.

According to industry research firm Autodata Corp., U.S. vehicle sales clocked in a 13.2 million, the lowest since 1992. The year before, annual sales were 16.1 million.

U.S. auto sales fell 36% in December, an alarming signal that we've yet to see the worst.

"It's one of the worst years ever, and this year will be worse," Stephanie Brinley, an analyst at consulting firm AutoPacific Inc. in Southfield, Mich., told Bloomberg "It's not a gas problem. It's not a credit problem. It's a consumer confidence problem, and it's worldwide."

Domestically, Chrysler LLC posted a 53% sales slump in December. Ford Motor Co. (F) sales fell 35%, and General Motors Corp. (GM) sales scaled back 31%, Bloomberg reported.

Among Japanese automakers, U.S. auto sales for Toyota Motor Corp. (ADR: TM) and Honda Motor Co. (ADR: HMC) fell 37% and 35%, respectively, the first full-year drop for each company since the mid-1990s, Bloomberg reported. U.S. sales for Nissan Motor Co. (ADR: NSANY) fell 31%.

Among European brands, Daimler AG's (DAI) Mercedes-Benz and Smart minicar sales fell 24%. Volkswagen AG (ADR: VLKAY) sales were down 14%. And Bayerische Motoren Werke AG's (BMW) BMW and Mini-brand autos sales fell 36%, Bloomberg reported.

Toyota Halts Output

In the face of falling demand, Toyota is giving credit-strapped consumers exactly what they want: No new cars.

Japan's top automaker said it will halt production for 11 days in February and March. And that will follow a three-day January stoppage at 12 of its Japan plants - four car assembly plants and eight engine, transmission and parts, manufacturers, Reuters reported.

"I never expected the crisis to spread this fast and leave this deep a scar," Toyota President Katsuaki Watanabe told reporters at a Tokyo event hosted by Japan's top business lobbies.

Honda and Nissan have plans to reduce annual production by at least 200,000 automobiles.

"I'd like to believe that we'll hit bottom [for the U.S. economy] some time this year," Watanabe said. "But if you look at the automobile market now, it's very, very tough. We need to proceed with the assumption that this situation could continue."

News and Related Story Links:

• Bloomberg:
  U.S. December Auto Sales Dive 36%, Drag Industry to 16-Year Low

• Reuters:
  Toyota orders 11-day output halt as sales slump

• Money Morning:
  Dour Demand Sends Japan 2008 Auto Sales Down Dramatically