Auto Sales Dimmed by Soft Economy

GM sales down 11%, Chrysler down 2% but Ford was up 0.4% and Toyota was up 0.3%

U.S. auto sales were stuck in low gear in November as soft economic conditions and worries about a housing maelstrom kept consumers cautious. Total light vehicle sales fell 1.6% last month from a year earlier to 1.179 million, according to an estimate by research firm Autodata.

General Motors Corp. said domestic new car sales skidded 11% in November, citing soft demand and a reduction in daily rental sales. GM said it sold 263,654 vehicles in the U.S.

Ford Motor Co. saw a modest 0.4% rise in unit new car sales in November after 12 consecutive months of declines, delivering 182,951 new cars and trucks. Ford said its sales were also lifted by interest in vehicles equipped with its mobile entertainment and communication system called SYNC, developed by Microsoft.

Chrysler LLC said Dec. 4 its new car sales in the U.S. for November dropped two percent from a year ago to 161,088, citing troubles with credit and housing. Chrysler vice president Darryl Jackson said its performance was encouraging in view of the economy. "High fuel prices and falling home prices continue to impact vehicle sales in November which remain below trend," he said. "We remain optimistic moving into December due to the growing availability of new models." The company's Jeep brand was hurt by high fuel prices, which discouraged consumers from buying gasoline-thirsty sport utility vehicles. Jeep brand sales fell two percent, but large SUVs saw the greatest impact with Jeep Commander down 45%.

Toyota had a 0.3% rise to a best-ever November sales of 197,189 vehicles, but even the Japanese juggernaut said conditions were less than ideal. "Rising fuel prices and sliding home values delivered a one-two punch this month," said Jim Lentz, executive vice president of the U.S .division. "But the industry's not down for the count. Demand for fresh, more fuel-efficient products continues to show strength."

Analyst Rebecca Lindland at Global Insight said the sluggish sales picture is unlikely to improve until the economic outlook brightens. "All the automakers will have to see a better economic backdrop," to see improvement, she said. "No one is going to be doing well next year. We are looking at a very nervous consumer, a consumer who is not going to be buying a new house or a new car."

Lindland said the housing credit woes are impacting consumers who are no longer able to tap home equity loans. "The home equity that used to pay for everything from kids' college to a new car just isn't there," she said.

She did fine some bright spots in an otherwise lackluster month, noting that Porsche saw a 2% gain, Mercedes-Benz sales increased 3.3% and BMW posted a 4.3% increase. "Consumers who have a lot of money and are not impacted by the credit crunch are still buying a lot of vehicles," she said.

Copyright Agence France-Presse, 2007

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