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Published: Tuesday, 1/6/2009

'08 car sales plunge to 16-year low

BY LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER

Sales of automobiles across the country plummeted in December and in all of 2008 to levels not experienced in 16 years, according to monthly and annual sales figures released by automakers yesterday.

Cars, trucks, sport utility vehicles, crossovers, hybrids, domestic, imported - all declined dramatically last year as crippling oil prices tag-teamed with a stifling credit market and the global financial meltdown to quash consumer interest in new vehicles.

For 2008, U.S. sales were down from the year before for Chrysler LLC by 30 percent, for General Motors Corp. by 28 percent, for Ford Motor Co. by 22 percent, for Toyota Motor Corp. by 15 percent, and for Honda Motor Co. by 8 percent.

GM sold the fewest vehicles in its home market since 1959, and last year's drops in full-year U.S. sales were the first for Toyota and Honda since the mid-1990s.

U.S. sales fell to levels not seen since 1992. GM sold its fewest cars since 1959. U.S. sales fell to levels not seen since 1992. GM sold its fewest cars since 1959.
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U.S. automakers accounted for 47.5 percent of domestic sales in 2008, the first year in which their combined market share was less than 50 percent, according to industry-analysis firm Autodata Corp. in Woodcliff Lake, N.J. The previous year's figure was 51 percent.

Asian automakers had 44.6 percent of the market, and European brands had 7.8 percent, Autodata said. It said vehicle sales for the year totaled 13.2 million, the fewest since 1992. Sales for 2007 were 16.1 million.

"In a sense, these are almost Depression-era statistics. Those are absolutely shocking numbers," said Joseph Phillipi, a longtime industry analyst with AutoTrends Consulting in Short Hills, N.J.

For December only, compared with the month in 2007, U.S. sales fell for Chrysler by 53 percent, for Toyota by 37 percent, for Honda by 35 percent, for Ford by 32 percent, and for GM by 31 percent.

The overall 2008 sales plunge of 2.7 million vehicles was the steepest for the industry since 1974, when the U.S. economy was still reeling from the impact of the first oil shock.

Sport utility vehicles made in Toledo shared the fate of the rest of the industry.

In December, Jeep Wrangler sales declined 22 percent to 7,048 from the same month a year earlier, Jeep Liberty dropped 54 percent to 4,529 units, and Dodge Nitro slumped 72 percent to 2,036.

For the year, sales of the Liberty were off 27 percent from 2007's to 66,911, Wrangler declined 29 percent to 84,615 units, and Nitro fell 51 percent to 36,368 units.

Jim Press, vice chairman and president of Chrysler, which operates both the Toledo Jeep Assembly complex in Toledo and the Toledo Machining plant in Perrysburg Township, called 2008 unprecedented.

"We were discovering, confronting, and adjusting to a lot of new realities" during the latter half of 2008, Mr. Press said, predicting continued slow sales for the industry at least through 2009. "We're hoping for the best, but we're preparing for the worst case," he said.

Dave Doster, Jeep sales manager at Yark Automotive Group, said the dealership sold 110 Jeep-brand vehicles in December and predicted that efforts to improve credit availability would increase sales and get furloughed Toledo Jeep workers back on the job.

"It's going to start loosening up where some people that don't have the highest credit scores, hopefully, money's going to be available to them at a better rate," Mr. Doster said.

"With more sales would bring more confidence in the employees and suppliers, and that would make a big difference."

The sales figures released by automakers yesterday were the first since the U.S. Treasury extended an initial $8 billion in loans to GM and Chrysler to prevent a cash crunch that both had warned could doom their companies.

GM said it expected to keep its 2009 sales forecast unchanged at a range of 10.5 million to 12 million vehicles, the continued slump it had forecast last month in seeking a bailout from Congress.

"We're optimistic that it's a year that will at least gradually improve and not see the massive deterioration that we saw in the third and fourth quarter of 2008," GM sales chief Mark LaNeve said in a conference call with reporters and analysts.

Ford, the only Detroit automaker that has not sought emergency government funds, said it was braced for initial sales results this year to extend the weakening trend that swept through the industry for most of 2008.

"The first several months of 2009 are going to feel very much like the last few months of 2008," said Ford economist Emily Kolinski Morris. "We see little to indicate a near-term improvement in either financial market conditions or economic activity."

Mr. Phillippi said the industrywide slowdown can be traced back to one thing: lack of consumer confidence.

"When you have consumer confidence cratering like it is, it's not surprising that people aren't buying cars," he said. "Unless you truly need to buy a vehicle, it's obviously a relatively easy decision to postpone."

Dana Johnson, an economist with Comerica Bank who closely follows the region's economy and its ties to the auto industry, said pain in the industry will continue, despite approval of the bridge loans for GM and Chrysler.

"To me, the government has done everything it should have done to provide interim financing, but that financing only allows for the restructuring of these companies," he said.

Information from The Blade's news services was used in this report.

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.



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