Carmageddon - The US New Vehicle Market Collapses

Discussion in 'OT Driven' started by TriShield, Oct 3, 2008.

  1. TriShield

    TriShield Super Moderator® Super Moderator

    Joined:
    Jul 6, 2001
    Messages:
    132,712
    Likes Received:
    1,554
    Location:
    PRESIDENTIAL TOWER, GREAT AGAIN, NY
    Automakers see sales sputter - Credit squeeze hit hard in September

    [​IMG]
    Unsold 2008 Escapes sat at a Ford dealership in Denver last month. Ford's U.S. sales fell 34 percent for September, the company's worst month this year.

    By Bill Vlasic
    and Nick Bunkley
    NEW YORK TIMES NEWS SERVICE
    October 2, 2008

    DETROIT – For the first time since 1993, automakers sold fewer than a million new cars and trucks in a single month in the United States, as a reeling economy scared people away from showrooms in September, and many eager buyers were unable to get loans.

    With industry sales dropping 26.6 percent overall compared with a year ago, car companies are likely to cut more production and jobs to compensate for falling revenue.

    The credit crisis contributed heavily to the steep decline – analysts estimated that it cost the industry up to 100,000 vehicle sales in the final week of the month, on top of lost sales because of high gas prices and the shaky economy.

    Auto executives said yesterday that the industry faces more misery ahead until a bailout package is passed in Washington.

    “We feel it is critical,” said Michael DiGiovanni, chief sales analyst for General Motors. “If it doesn't happen, it's going to set off a continuing downward spiral in the economy.”

    Nearly every automaker posted double-digit declines. Sales were down 34.6 percent at Ford, 32.8 percent at Chrysler, 32.3 percent at Toyota and 24 percent at Honda.

    GM bucked the trend somewhat with only a 15.8 percent drop in sales. But it was helped by employee-discount deals offered to all consumers and an increase in sales to rental-car fleets.

    Overall, the industry sold about 964,000 vehicles in September, compared with 1.31 million in the same month a year earlier, according to the research firm Autodata. There were 24 selling days this September, compared with 25 a year ago.

    “This is the worst point we have seen in 15 years,” said Jesse Toprak, head of industry analysis for the automotive Web site Edmunds.com. “And it is likely to be even worse in the month of October.”

    Toprak said sales for the entire year are projected to be about 14 million vehicles, by far the lowest figure in more than a decade.

    “There's no question this is an automotive recession,” said Erich Merkle, an analyst at the accounting and consulting firm Crowe Horwath in Grand Rapids, Mich. “It's going to take us a long time before we get back to that 16 million mark.”

    Automakers said that tighter lending practices by banks have prevented countless consumers from getting financing deals for new vehicles. Moreover, they say the paralysis in Washington on a bailout bill and the startling failures of Wall Street investment banks have frightened away even creditworthy consumers.
    At Toyota, the year-to-year sales drop was the worst the Japanese automaker has experienced in the United States in 20 years.

    “There is a lack of consumer confidence,” said Donald Esmond, senior vice president for Toyota's North American sales operations. “They've got their hand on their wallet, and they're not spending their disposable income.”

    The fall-off in sales across the industry occurred despite a nearly 19 percent increase in incentives from a year earlier. The average automaker incentive during the month was $2,801, compared with $2,357 in September 2007, according to Edmunds.com.

    Automakers said there was a drastic decline in dealership traffic toward the end of the month, when the troubles on Wall Street triggered a full-blown economic crisis.

    “During the last 10 days of the month it was extremely weak,” said George Pipas, a market analyst at Ford. “It was tantamount, really, to a natural disaster.”

    Executives at the Detroit automakers declined to say whether they are planning further production cuts in the fourth quarter to balance the shrinking demand.

    But analysts said further cuts and restructuring moves appear inevitable.

    “We believe we will see an increase in promotional activity to stimulate demand, as well as a reduction in production volumes,” said Toprak.

    Detroit has already cut tens of thousands of jobs since 2006. Many of its assembly plants have been idled for weeks at a time this year to reduce production of slow-selling pickup trucks and sport-utility vehicles.

    GM, Ford and Chrysler are also burning through billions of dollars in cash reserves to fund new products, even as their businesses falter. GM lost $15.5 billion in its second quarter, and Ford lost $7.8 billion.

    The credit crunch is also hitting dealers hard. Ford, for example, is increasing the cost of loans to dealers to pay for new-vehicle inventories.

    Nearly 600 of the nation's 20,770 franchised new-car dealerships have closed their doors this year, according to the National Auto Dealers Association.

    “We are looking at a very fragile economy,” said Emily Kolinski-Morris, Ford's chief economist. “I don't think anyone can say where the bottom might be.”

    [​IMG]

    Automaker shares decline across the board after US vehicle sales in September nosedive

    [​IMG]
    General Motors logo at an automotive sales lot. US auto sales took a beating in September as financial turmoil on Wall Street emptied dealer showrooms and major automakers reported sales drops of up to 37 percent Wednesday.

    Thursday October 2, 12:10 pm ET

    NEW YORK (AP) -- Shares of major automakers declined on Thursday, a day after the companies reported dismal September U.S. sales.
    Tight credit markets and turmoil in the financial sector drove consumers away from car purchases last month, with sales in the U.S. plunging 27 percent compared with September 2007, according to Autodata Corp.

    Every major brand except General Motors Corp. reported a sales decline of at least 24 percent. GM, whose sales fell a more modest 16 percent, was buoyed by its employee-pricing incentive program offered during September and late August.

    "Detroit Three sales remained strained in September, with Ford and Chrysler sales underperforming the industry," Citi Investment Analyst Itay Michaeli wrote in a research note Thursday. "That Chrysler car sales remain almost as weak as truck sales demonstrates that consumers are not responding to the company's products."

    Asian automakers, were particularly hard-hit despite their more fuel-efficient lineup, with Toyota Motor Corp. reporting a sales drop of 32 percent, Honda Motor Co. posting a 24-percent decline and Nissan Motors showing a 37-percent slump.

    Automaker shares fell across the board in midday trading. GM shares lost 26 cents, or 2.9 percent, to $9.19. Ford gave up 18 cents, or 4 percent, to $4.37.

    Toyota, meanwhile, fell $3.73, or 4.5 percent, to $80.17 after hitting a three-year low of $79.64 earlier in the session. Honda shares declined $1.50, or 5.1 percent, to $28.10. Nissan shed 65 cents, or 4.9 percent, to $12.43 after hitting a six-year low of $12.28 in intraday trading.

    Shares of Germany's Daimler AG lost $3.21, or 7 percent, to $42.90. That stock fell as low as $42.60 earlier in the session, a trade not seen since 2005.

    [​IMG]

    Foreign automakers also hit - Toyota and Nissan sales all drop more than 30 percent as buyers have trouble getting loans.

    [​IMG]
    Despite price slashing, an unsold 2008 Honda Accord sits at a dealership in Littleton in July. Tight credit, economic concerns and high gasoline prices have combined to make September a bleak month for auto sales for both domestic and foreign carmakers.

    By Alan Ohnsman and Mike Ramsey

    Oct. 2 (Bloomberg) -- Honda Motor Co. and Nissan Motor Co., the only big automakers to add U.S. sales through the first eight months of the year, couldn't escape an industrywide plunge in September as the credit crisis deterred buyers.

    Sales for Asia-based brands fell 30 percent, led by Toyota Motor Corp.'s 32 percent tumble, Honda's 24 percent drop and a 37 percent decrease for Nissan. Toyota and Honda haven't posted declines that large since the 1980s.

    The results dragged U.S. market share for Japanese and South Korean automakers to the lowest since April 2007 after lenders tightened standards and bank failures chilled demand. Last month's total was 39.9 percent, down from 42.1 percent a year earlier, according to industry-research firm Autodata Corp.

    ``The best thing we can say about September is it's over,'' Don Esmond, senior vice president of Toyota's U.S. sales unit, said in a conference call yesterday. ``We're seeing buyers on the sidelines, hanging onto their wallets.''

    Industrywide sales fell for an 11th straight month, the longest slide in 17 years. Visits to dealerships fell more than 50 percent in the last 10 days of September, after Lehman Brothers Holdings Inc. collapsed and debt markets seized up, said CNW Marketing Research of Bandon, Oregon.

    Toyota declined 3.4 percent to 4,310 yen at the close of trading in Tokyo. Honda dropped 4.5 percent to 3,000 yen and Nissan shed 4 percent to 668 yen.

    Credit Crisis

    Fallout from the credit crisis overwhelmed the advantages held by the Asian brands through August, when rising fuel prices caused buyers to shun the light trucks of Detroit automakers in favor of the smaller, more-efficient vehicles that dominate Asian brands' lineups.

    Overall sales of new vehicles dropped 27 percent last month, Woodcliff Lake, New Jersey-based Autodata said. It was the biggest monthly drop since January 1991, according to Ward's AutoInfoBank in Southfield, Michigan.

    Billionaire Warren Buffett, the world's preeminent stock picker, said the U.S. economy is ``flat on the floor'', in a television interview with Charlie Rose that was to air late yesterday on PBS.

    Economic Fear

    ``In my adult lifetime I don't think I've ever seen people as fearful, economically, as they are now,'' said Buffett, chairman of Omaha, Nebraska-based Berkshire Hathaway Inc.

    Toyota, second in U.S. sales behind General Motors Corp., sold 144,260 vehicles, down from 213,042 a year earlier. It was the biggest percentage decline since July 1987, Bob Carter, vice president of the company's U.S. sales unit, said yesterday.

    Sales fell across the company's Toyota, Lexus and Scion brands, with the exception of two models: the revamped Sequoia and Lexus LX 470 large sport-utility vehicles that have been available for less than a year.

    Toyota's Esmond said the Toyota City, Japan-based automaker had no plans to further curtail North American output beyond the previously announced production halt for Tundra large pickups and Sequoias from Aug. 8 through November to reduce inventory.

    U.S. market share for Toyota, Asia's biggest automaker, was 15 percent last month, down from 16.2 percent a year earlier.

    Honda's Slide

    ``It's a credit story industrywide,'' said analyst Tom Libby, at market-research firm J.D. Power & Associates in Troy, Michigan. ``There is a psychological impact of all the news about banks in trouble.''

    Honda, which hasn't had a full-year U.S. sales decline since 1993, sold 96,626 vehicles, compared with 127,200. The drop was the biggest for the Tokyo-based company since November 1981.

    ``Customers just weren't coming into dealerships,'' Honda spokesman Chris Martin said in an interview yesterday.

    Honda's market share last month was 10 percent, up from 9.7 percent a year earlier.

    Even companies with compelling new products aren't finding buyers, said Jesse Toprak, director of industry analysis for automotive research firm Edmunds.com in Santa Monica, California.

    ``The main reason for the decline is the lack of consumer confidence,'' Toprak said in an interview. ``A lot of consumers have the ability and desire to make a purchase, but are going to wait and see how things turn out.''

    Nissan, Hyundai

    Nissan, Japan's third-largest carmaker, sold 59,565 autos, compared with 94,269 a year ago. The Rogue small SUV and new GT- R sports coupe were the only models to post gains for the Tokyo- based automaker.

    The company had 6.2 percent of new-vehicle sales last month, down 1 percentage point from September 2007.

    Hyundai Motor Co., South Korea's largest automaker, reported a 26 percent drop in sales. The Seoul-based company sold 24,765 vehicles, down from 33,214 a year earlier.

    Hyundai's market share was 2.6 percent, up 0.1 point, Autodata said.

    Kia Motors Corp., a Hyundai subsidiary, sold 17,383 vehicles, down 28 percent. Ford-affiliated Mazda Motor Corp. said it sold 16,169 autos, a 36 percent decline.

    Among smaller brands, Fuji Heavy Industries Ltd.'s Subaru unit had a 12 percent drop. Mitsubishi Motors Corp.'s sales fell 39 percent and Suzuki Motor Corp. said its sales dropped 47 percent.

    [​IMG]
     
  2. you know me

    you know me OT where the douchbags play

    Joined:
    Dec 7, 2001
    Messages:
    84,664
    Likes Received:
    17
    so if I wait two months i can buy a car with my fiancee's used panties?
     
  3. art_VW_shark

    art_VW_shark OT Supporter

    Joined:
    Oct 23, 2005
    Messages:
    156,666
    Likes Received:
    173
    Location:
    Bosstown
    don't worry-once we get out of this mess (even if on face value), and more importantly, once consumer confidence returns, which, knowing the swayability of the electorate, will happen artificially early, people are gone capitalize on good deals.
     
  4. Drewski

    Drewski New Member

    Joined:
    May 22, 2002
    Messages:
    11,340
    Likes Received:
    0
    Location:
    Scarberia aka Scarlem, ON
    *waiting patiently to buy GM stock*
     
  5. you know me

    you know me OT where the douchbags play

    Joined:
    Dec 7, 2001
    Messages:
    84,664
    Likes Received:
    17
    not if they can't get loans
     
  6. art_VW_shark

    art_VW_shark OT Supporter

    Joined:
    Oct 23, 2005
    Messages:
    156,666
    Likes Received:
    173
    Location:
    Bosstown
    hehe. it's not like all lenders are insolvent. did GM sell off GMAC? :bowrofl:
     
  7. art_VW_shark

    art_VW_shark OT Supporter

    Joined:
    Oct 23, 2005
    Messages:
    156,666
    Likes Received:
    173
    Location:
    Bosstown
    wait till it falls to -10 dollars/share; they'll pay you
     
  8. you know me

    you know me OT where the douchbags play

    Joined:
    Dec 7, 2001
    Messages:
    84,664
    Likes Received:
    17
    you're an idiot
     
  9. August Burns

    August Burns New Member

    Joined:
    Oct 19, 2004
    Messages:
    4,435
    Likes Received:
    0
    Location:
    Cook County
    I work at a honda dealer and we are beyond slow. I've seen it bad, but not this bad.
     
  10. REDTAIL

    REDTAIL New Member

    Joined:
    Mar 31, 2008
    Messages:
    1,368
    Likes Received:
    0
    Does this mean they'll start building vehicles Americans actually want to buy?
     
  11. you know me

    you know me OT where the douchbags play

    Joined:
    Dec 7, 2001
    Messages:
    84,664
    Likes Received:
    17
    I kinda got that feeling when I pulled into a bmw dealer driving a yaris and wearing a tshirt and ripped jeans and I was able to get a 135i out for a drive
     
  12. art_VW_shark

    art_VW_shark OT Supporter

    Joined:
    Oct 23, 2005
    Messages:
    156,666
    Likes Received:
    173
    Location:
    Bosstown
    :ugh::ugh::ugh: yes no one is doing financing at all sure
     
  13. art_VW_shark

    art_VW_shark OT Supporter

    Joined:
    Oct 23, 2005
    Messages:
    156,666
    Likes Received:
    173
    Location:
    Bosstown
    :ugh: they'll let anyone who isn't visibly joking test drive anything
    I know a 17 year old that test drove a M3
     
  14. deusexaethera

    deusexaethera OT Supporter

    Joined:
    Jan 27, 2005
    Messages:
    19,712
    Likes Received:
    0
    Pics?
     

Share This Page