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U.S. Auto Sales Fell 36% in December
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The industry is bracing for even weaker sales this year. Emily Kolinski Morris, Ford's senior economist, said the first quarter is going to be "bad, no matter how you look at it."
"We expect the first several months of 2009 are going to feel very much like the last few months of 2008," she said.
December was filled with hefty incentives and big advertising campaigns to woo consumers back to showrooms. Many of these enticements are continuing this year to boost sales.
"These are tried-and-true ways they use to finish off the year and extinguish any prior-year inventory," said Michael Robinet, vice president of global forecast services for CSM Worldwide.
General Motors is offering financing at as low as zero percent interest for up to five years on select new cars.
South Korean automaker Hyundai, which posted a 48 percent sales decline in December, launched a program yesterday that will allow people to return their cars free if they lose their jobs and can't make payments. Covering up to $7,500 in depreciation within a year of purchase, the program aims to address financial woes such as unemployment and disability.
Cutting more costs, Chrysler yesterday announced plans to scale down its Hollywood theatrics at the annual North American International Auto Show next week. In 2007, the company showed off its new Dodge Ram by driving more than 120 steer through the streets of Detroit. This year the company won't even be hosting the media; Chrysler executives must purchase their own tickets to the show's charity ball.
"Less glitz and no giveaways," blogged Rick Deneau, director of product, brand and sales communications. "These are unfortunate but necessary steps to help return Chrysler to a solid footing. And with the government loan to help Chrysler bridge the financial crisis, it's the right thing to do."
But there is only so much automakers can do to reverse their financial distress, Robinet said. They will need the government to step in, he said, to improve "the two C's: credit and confidence."
Domestic auto executives expressed their hope that the Obama administration would create a stimulus package that would help lift auto sales in the second half of this year.
But Chrysler's Press was quick to correct the notion that they might need additional government aid.
"We're not counting on it," he said. "We're ready to operate in this environment."
