Auto sales dropped sharply in September as consumer unease mounted in the face of the crisis on Wall Street and restricted credit.
Toyota Motor Corp., Chrysler, Ford Motor Co. and Nissan Motor Co. reported U.S. sales declines of more than 30 percent for the month, compared with September 2007, while Honda Motor Co. and General Motors Corp. showed sharp downturns, as well.
Overall, the industry sold 964,873 vehicles - a 26.6 percent slide from a year earlier and its biggest percentage drop in 17 years, Autodata Corp. reported yesterday.
Industry executives blamed public unwillingness to make purchases amid the nation's financial troubles, as well as lack of credit from lenders.
"It's tantamount, really, to a natural disaster," said George Pipas, chief sales analyst at Ford. Showroom traffic, he added, was at levels associated with "a large storm or the aftermath of 9/11."
According to CNW Marketing Research, visits to auto dealerships in the last 10 days of September declined by 51 percent, compared with the same period last year, the largest slide in at least 22 years.
In response, carmakers called on Congress to pass the financial system rescue plan as soon as possible. The bill passed the Senate last night, sending the measure back to the House for a second try.
"If the bill helps restore consumer confidence, let's hurry up and make it happen," said Don Esmond, Toyota's senior vice president for automotive operations.
Toyota said its U.S. sales last month were down 32.3 percent from the year-earlier period, while Ford declined 33.7 percent, Nissan slipped 36.8 percent and Honda fell 24 percent. Since January, Toyota's sales are down 10.4 percent, while Ford's have fallen 17.1 percent. Maserati and Bentley were the only makers to post gains in September.
Until last month, Honda had been one of the few carmakers to show a net gain for the year, but declines in August and September have now dropped it down to an overall 1.1 percent downturn through the first three quarters. Truck and SUV-heavy Chrysler saw a 32.8 percent decline for the period, and it is off 25 percent for the year.
GM had a relatively modest 15.5 percent decline, provoking a near-celebratory response from the nation's largest automaker.
"A few months ago, I'd have jumped out the window with these kinds of numbers," said Mark LaNeve, head of sales and marketing for GM. "We're in a kind of crazy market now."
This has been a very difficult year for carmakers, with industry sales down 12.8 percent across the board since January. In September, manufacturers were on pace to sell 12.5 million vehicles for the year, far below last year's total of 16.1 million, according to Autodata.
Consumer confidence has been sliding since last year, and carmakers were hammered by soaring gas prices in the spring and early summer. Lately, dealers complain that customers are being turned away because banks won't approve loans for anyone without near-perfect credit. A salesman at Allen Gwynn Chevrolet in Glendale, Calif., said he was forced to turn away a customer with a relatively high credit score who wanted to buy a Corvette this week.
"We're losing about three customers a day because of lack of credit," said Pogos Yenkanyan, team manager for new-car sales at Allen Gwynn. "That adds up to 100 cars a month."
He and others pointed to the demise of leasing - which has essentially come to a halt for many manufacturers - as another factor.
Chrysler abandoned leasing as of Aug. 1, while Ford and GM have greatly increased the cost of such programs. GM said that 1 percent of its business in September was leases, far below a historical average closer to 20 percent.
Nerses Nersisyan, a salesman at Star Chrysler Jeep in Glendale, said that most of his customers preferred leasing - and that's not good for him.
He said an outside bank lease on a Chrysler Sebring, for example, might cost $400 a month, while Mazda is offering a $249 lease rate on its Mazda6 sedan.
"My customers have a budget," Nersisyan said. "If I don't make the budget, they go to somebody who does."
Michael DiGiovanni, GM's top sales analyst, said that inventory control and dealer incentives - such as the two months of employee pricing GM offered through Tuesday - simply aren't enough to drive business.
"We absolutely think it's critical that the federal aid package be passed," he said.