After more than a year of declining sales, February provided a glimpse of even worse times to come yesterday as General Motors Corp., Ford Motor Co., Toyota Motor Corp. and Chrysler reported declines of at least 40 percent in the U.S. market.
Despite record incentives from carmakers, worsening economic conditions kept dealerships quiet and consumers in their older cars, making the past month the worst February since 1967, according to GM.
GM said U.S. sales were down 53 percent for the month, with 127,296 cars and light trucks sold, while Ford's declined 48 percent, with 99,060 sales. Toyota sold 109,583 vehicles, a 40 percent decline, and Chrysler was down 44 percent with 84,050 sales.
Nissan Motor Co.'s 54,249 vehicles sold represented a 37 percent drop. Honda Motor Co. sales were down 38 percent, to 71,575 cars and trucks delivered in the month.
Korean automaker Hyundai provided one of February's few bright spots, saying its sales fell by just 1.5 percent. Hyundai's sales were helped by a recent advertising blitz that included the Super Bowl and the Oscars, as well as a program that allows buyers to forestall payments for 90 days and to bring back their new vehicles if they lose their jobs.
"We're pleased to maintain our sales volumes on a year-over-year basis, especially in an industry under this type of economic stress," said Dave Zuchowski, Hyundai's head of U.S. sales.
GM and Ford estimated that overall industry sales would be down by about 40 percent on the month.
"Americans are pulling in their horns, trying to save, trying to protect themselves from uncertainty," said Michael DiGiovanni, GM's top sales analyst.
Sales were at depressed levels in January - the lowest since 1981 - but appear to have fallen further. Ford and GM said they estimated the annualized selling rate - a key industry figure extrapolated from one month of sales - at roughly 8.9 million cars and light trucks for all automakers selling in the United States.
That's half a million fewer than the January rate and 1.4 million below the rate in the weak fourth quarter of last year. It's a chilling sign of how fast the industry's sales are declining and how difficult a financial environment automakers face.
A report this week by Edmunds.com showed that the industry as a whole employed the highest level of incentives on vehicles in a quarter-century, up 8 percent from January and 16 percent from February 2008.
Meanwhile, new studies indicate that increases in values of used cars suggest that consumers are buying cars as cheaply as possible and avoiding new vehicles when possible.
"This shows us that we didn't reach the bottom [in January]," said Emily Kolinski Morris, Ford's senior U.S. economist. "It may be that this month is now the bottom, but there's no anchor on the economic horizon to allow us to make that call conclusively."