| New Car Sales Down |
| By Credit Federal |
Published
10/2/2008
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Auto Loan
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Auto sales down last month - buyers can have bargaining power over dealerships
Tightening credit, worries over the economy plus escalated gas prices all contributed to the break-down of new car sales. Ford, Toyota, Chrysler and Nissan all reported drops exceeding 30%.
Ford Motor's 34% decline marked its worst sales month this year, and the results across the industry are a strong indication that the financial turmoil that has swelled since the middle of last month is pushing the auto industry deeper into its trough.
General Motors; due largely to its offer of employee pricing on most of its vehicles, saw U.S. sales drop only 16%, which boosted the automaker's market share to its best level all year.
Not only are consumers pockets empty from a poor economy, they're bad credit ratings are making it difficult to qualify for auto loans. On top of that, many banks have restricted lending because of widespread mortgage defaults that led to disruptions in the financial markets and the collapse of several banks. Additionally, several automakers' finance arms have limited or discontinued leasing.
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Jim Farley, Ford's group vice president for marketing, said economic conditions have raised uncertainty among buyers. He said: "Even if you have good credit, there's a reluctance to pull the trigger on a big ticket item."
George Pipas, Ford's top sales analyst, said nearly all automakers saw "extremely weak" sales in the waning days of the month as the Wall Street crisis grew and Congress debated the government's $700 billion bailout of the financial industry.
GM's market share grew to more than 28% in September because it experienced smaller sales drops than its competitors, according to Mark LaNeve, the automaker's vice president of North American sales.
Nearly all of Chrysler's models posted sales declines. The few models to post gains included its Caravan and Town & Country minivans, which both posted 6% increases. Overall, Chrysler car sales fell 29%, while sales of light trucks dropped 34%.
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