Auto Sales Plummeted To 27-Year Low in Jan.

By Kendra Marr
Washington Post Staff Writer
Wednesday, February 4, 2009

U.S. auto companies continued their free fall into the new year, posting their lowest sales totals in more than two decades.

Detroit's manufacturers were hit the hardest in January, punctuating the plight of General Motors and Chrysler as they seek additional government aid. The automakers are scheduled to return to Congress Feb. 17 with plans showing how they hope to remain viable, a key condition for receiving additional federal loans.

Although January is typically a slow sales month, the auto industry continues to reel from an erosion in consumer confidence. Across the industry, automakers sold 656,976 new cars and trucks in January, a 37 percent decline from January 2008, according to preliminary data released yesterday by research firm Autodata.

Sales at the nation's five largest companies plummeted. Chrysler's sales fell a whopping 55 percent compared with a year ago. GM's were down 49 percent, and Ford's dropped 39 percent. Toyota said sales declined 32 percent. Honda's slid 28 percent for the month.

The totals marked the first time China passed the United States in monthly sales, and it was GM's slowest January since 1963, said Mike DiGiovanni, GM's executive director of global market and industry analysis.

"To put that in context, that's the year Michael Jordan was born, Chubby Checker ruled the music world, Coke introduced its first diet drink," DiGiovanni said in a conference call.

A handful of Asian carmakers bucked the trend. Hyundai's sales jumped 14.3 percent, Subaru's climbed 8 percent and Kia posted a 3.5 percent gain.

Automakers are bracing for another tumultuous year.

"It's going to be very tough," Donald V. Esmond, Toyota's senior vice president of automotive operations, said in a conference call. "We're going to be bouncing around the bottom."

Several company executives held out hope that the upcoming stimulus package would improve sales in the second half of this year. At the Washington Auto Show, executives voiced their enthusiasm for an amendment by Sen. Barbara A. Mikulski (D-Md.) that would grant tax deductions to purchasers of new cars and trucks, as well as a "cash-for-clunkers" proposal from Sens. Dianne Feinstein (D-Calif.), Susan Collins (R-Maine) and Charles E. Schumer (D-N.Y.) that would encourage drivers to trade in vehicles for more fuel-efficient cars and trucks.

Seasonally adjusted, the January data translates into 9.57 million sales on an annualized basis, the slowest pace since June 1982. In recent years, that rate hovered around 16 million.

A number of factors triggered the sluggish sales. The industry extended its December holiday shutdown into January, a move that helped stall fleet sales. Rental car companies typically buy up cars two weeks after they roll off the assembly line. So when factories stopped production, their deliveries screeched to a halt. These fleet customers also are holding on to their cars longer, several companies said.

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