By Kendra Marr
Washington Post Staff Writer
Thursday, April 2, 2009
Only in America's beleaguered auto industry could a 37 percent drop in sales signal good news.
After months of falling sales pushed some U.S. automakers to the brink of collapse, a slight uptick in March compared with February brought a glimmer of hope that the auto industry may have already hit bottom.
"It's maybe a little tiny sign of life," Jim Press, Chrysler's vice chairman and president, said in a conference call. "It's kind of like a little seedling you have to nourish. It's too early to tell. Customers are worried. There's still a lot of bad news out there. But it isn't continuing to be worse, worse, worse."
Yesterday, car companies said they sold 857,735 new cars and trucks last month, a small improvement from February, according to preliminary data released by the research firm Autodata.
Then again, spring tends to be better time for vehicle sales, as warm weather brings consumers back to showrooms. Overall, sales still tended to be well off their pace of just a year ago.
General Motors' sales fell 45 percent compared with the same month in 2008. Ford's sales tumbled 41 percent for the month.
Chrysler sold 39 percent fewer cars and tracks than a year ago. And Toyota, Honda and Nissan posted declines that were only slightly better.
Seasonally adjusted, the March data translate into 9.86 million sales on an annualized basis. A year ago that rate was 15.1 million.
The industry is rallying to get consumers back into showrooms.
Yesterday GMAC took steps to reduce dealers' cash crunch by temporarily waiving some dealer fees, eliminating loan payments on aging unsold cars and postponing wholesale interest charges. The finance company also announced it would make $5 billion available to expand lending to potential car buyers over the next two months.
Both GM and Ford unveiled buyer-protection programs Tuesday that promised to help make car payments for customers who lose their jobs. And some lawmakers on Capitol Hill continued to press legislation that would offer cash incentives to people willing to scrap their gas-guzzlers.
But that might not be enough, analysts say.
About four in 10 Americans said they have delayed or canceled plans to buy a new car in the past six months, according to a Washington Post-ABC News poll conducted in late March.
Rising unemployment, tanking stocks and deflating home values pushed consumers away from showrooms, forcing 900 dealers to close their doors in 2008. This year the National Automobile Dealers Association calculates that the ongoing economic slump will shutter another 1,200 dealerships.
Cory S. Hoffman, general manager of Sheehy Auto Stores in Marlow Heights, said financing continues to be a challenge for his customers. And many people attempting to trade in larger gas-guzzlers have found they owe more on the cars than they can get in a trade.
But Ford's rebates have aided sales, helping more people qualify for loans. He said March sales for the Ford Focus rose 36 percent when the company raised the rebate to $3,000 from $2,000.
"Ninety percent of people are financing vehicles and [the decision to buy] comes down to getting a monthly payment they feel comfortable with," Hoffman said.
But convincing drivers is only half the problem. A sharp decline in tourism has prompted car rental companies to shrink their fleets, meaning fewer sales for automakers. Fleet sales for Ford, GM and Chrysler are all down by double digits.
Staff writers V. Dion Haynes and Thomas Heath contributed to this report.