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US auto sales plunge near 30-year lows - Naveed Yaseen - 05-02-2009 07:39 AM
CHICAGO (May 02 2009): US auto sales in April were on the road to plunging to their lowest levels in nearly 30 years, according to sales reports released on Friday, the day after Chrysler LLC filed for bankruptcy. Japan's Toyota Motor Corp posted the largest sales drop at 42 percent among major automakers in the US market, followed by Japan's Nissan Motor Co Ltd at 38 percent.
Sales at US automaker Ford Motor Co slid almost 32 percent last month, while sales at General Motors Corp, which like Chrysler has been operating under federal supervision, fell 34 percent. Honda Motor Co Ltd's sales were off 25 percent.
At Chrysler, which shut down production on Friday as it began the first day of bankruptcy hearings, April sales results were due to be released later in the day. "Wow, what a month in the last couple of days in the automobile business," Ken Czubay, Ford vice president of sales and marketing, said on a conference call. "Clearly, we continue to operate in a very challenging economic environment."
Ford officials said the US economy appears to be reaching a bottom, citing rising consumer confidence. The automaker expects US auto industry sales to recover in the second half of the year. Detroit and Japan's automakers are expected to post sharp US sales declines of at least 30 percent in April compared with a year ago as the industry deals with the recession.
The weak demand led Chrysler, owned by Cerberus Capital Group, to file for bankruptcy on Thursday and announce an alliance with Italy's Fiat. GM, surviving on $15.4 billion of government loans it received at the start of the year, faces similar pressures as it races to win sweeping cost cuts from bondholders and its major union by a US government-imposed June 1 deadline.
US auto sales typically account for as much as one-fifth of all retail sales in the country and represent one of the first indicators of consumer demand every month. Both GM and Chrysler have announced plant shutdowns to slash bloated vehicle inventories.Ford sales fell to 134,401 vehicles in April including all of its brands, from 196,385 vehicles a year earlier. For just the Ford, Lincoln and Mercury brands, sales fell 31.4 percent.
However, officials said Ford gained US market share in April without boosting incentives to draw consumers into dealer showrooms. The industry overall boosted such spending in April by an average of $600 per vehicle compared with last year, Ford said. Ford, which posted a smaller than expected loss of $1.43 billion in the first quarter, is the only US automaker not operating with emergency US government loans.
The US automaker is restructuring its operations and said last month that it has been in talks with potential buyers for its Swedish luxury brand Volvo, which saw US sales fall almost 37 percent. The industry-wide sales rate of cars and light trucks in April on an annualised basis is expected to be in the low- to mid-9 million unit range, Ford officials said. That would mark the 18th consecutive month of year-over-year declining sales and would be down from 9.9 million in March.
Also on Friday, Daimler AG said US sales including Mercedes and the Smart minicar fell almost 31 percent, while Porsche AG sales slumped 35 percent. Ford shares were down 3.2 percent and GM shares were down 5.7 percent on Friday afternoon on the New York Stock Exchange.
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