U.S. New Auto Sales Hit 15-Year Low

Depending on who's counting, sales of new vehicles in the U.S. are now at the lowest ebb in 15 years and nobody is quite sure when they will begin to recover. Officials from Honda Motor Co. said April 3 they have ordered production cuts. "We are taking three days of production out of the schedule at the Marysville plant," said spokesman Ed Miller. The Marysville plant builds the Honda Accord, one of the most popular cars sold in the United States. "We're have an 80 day supply of Accords right. Normally we wouldn't do anything but there is a lot of uncertainty right now," he said. The first down time is slated to occur with the Memorial Day Holiday next month and the second slot is scheduled to coincide with the Fourth of July holiday.

Toyota and Nissan also announced production cuts last month and it is the first time in several years that all three big Japanese automakers, which build substantial number of vehicles in the U.S. have cut production at the same time.

General Motors, Ford Motor Co. and Chrysler LLC also have announced production cuts during the first quarter. Ford cut production by 10%, according to Ford analyst George Pipas.

GM has lost more than 100,000 units because of the ongoing strike at American Axle and Manufacturing Holdings Inc.

Chrysler vice president of sales Steve Landry said March sales were so horrible, he didn't even want to think about the prospects beyond the next 30 days with consumers challenged by tough terms for obtaining credit, falling housing prices and rising fuel prices.

And Jim Farley, who is charge of sales and marketing at Ford, agreed the outlook for the next few months was not all that promising. "This is a very challenging external environment," said Farley. "It is crucial we continue to employ a disciplined process to gauge demand and plan production on a segment-by-segment and region-by-region basis," Farley said during Ford's monthly conference call on sales and economic conditions.

Even Toyota, which has rapidly overtaken its U.S. competitors in the past three years, has seen sales drop 5.6% in the first quarter of 2008 and is sitting on large inventories of unsold trucks and sport utility vehicles. Toyota now has more than 70-day supply of new Tundra pickup trucks, sitting on dealer lots and 100-day supply of the Sequoia SUV, spokesman Mike Michels said.