Auto sales wobble in June, GM plunges

NF Reporter · 07-03-2007, 09:02 PM

Reuters - General Motors Corp. on Tuesday posted a steeper-than-anticipated 24 percent drop in June sales, as U.S. automakers lost share and overall vehicle sales sputtered in the face of high gas prices and a weak housing market.

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waltky · 08-29-2007, 10:32 PM

Car industry taking a hit from the subprime crisis...

Mortgage mess cools auto demand
Aug 29, 2007 - Credit crunch cools demand for automobiles; Data show twice as many Americans are putting off purchasing vehicle

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Just when the U.S. automotive sector looked to be getting its legs underneath it after a years-long slump, another stumbling block has come along to knock it off kilter — the credit crunch. The ongoing pain in the housing sector — including higher monthly payments for some owners and declining home values for others — is persuading many Americans that buying a car is not a good idea right now, according to market research company CNW Marketing Research.

Recent polling by the company shows that nearly 18 percent of people in the market for a car or a truck are delaying their purchases because of home-related issues, up from 9 percent in 2006. Other data show consumers may be turning their attention to used cars instead. According to automotive information Web site Edmunds.com, online interest in used cars is up 24 percent this year over last year, while interest in luxury cars is down 19 percent and interest in economy cars (typically small, inexpensive models) is up 18 percent since December.

Adding to the lack of enthusiasm for new cars is the fact that automakers are not offering the same enticing incentives as in years past. These incentives, whether rebates or zero-percent financing options, are designed to lure car buyers into automotive showrooms, but auto deals are not as sweet as they were in recent years, when automakers were on a stronger financial footing said George Magliano, director of automotive industry research for the Americas at Global Insight. “Manufacturers are tightening up on this,” he told CNBC. “Fundamentally, we think the consumer has been hit hard by the declining housing market, and also by higher energy prices and a slowdown in employment. So it’s not just the short-run impact of the credit crunch that’s having an impact here.”

More Credit crunch cools demand for automobiles - The Driver's Seat - MSNBC.com

waltky · 12-29-2007, 03:37 AM

Auto industry hurting...

For car sales, this year may mark worst in 10
Fri., Dec. 28, 2007 - High gas prices, housing slump, weakening economy discourage shoppers

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Industry analysts are predicting a lackluster end to an already dismal year for automakers, likely the worst in nearly a decade. Holiday discounts failed to bring consumers out of their funk, and December sales are expected to fall around 4 percent, which would bring the full-year total for U.S. auto sales to 16.1 million vehicles, the lowest volume since 1998.

Sales have been hurt by consumer anxiety over gas prices, the housing crunch and the overall weakening economy. Industry watchers warn that the 2008 auto sales performance could be even weaker.

"Given the current economic challenges and the uncertainty associated with the upcoming presidential election, we do not anticipate that 2008 will be any more robust for the car business," said Jesse Toprak, chief economist for the auto information site Edmunds.com. Toprak said there is little promise for a turnaround until 2009.

More For car sales, this year may mark worst in 10 - Autos - MSNBC.com

waltky · 10-02-2008, 04:41 AM

Gettin' tough in Motor City...

Auto Sales Fall 27% As Credit Tightens
Thursday, October 2, 2008; Americans steered clear of auto dealerships in September, sending sales of new cars and trucks tumbling as credit conditions tightened.

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Overall, automakers sold 964,873 new cars, trucks and minivans in the United States last month, a fall of 27 percent from September a year ago, according to preliminary data released yesterday by the industry research firm Autodata. General Motors, Toyota, Ford and Chrysler, the four largest automakers in the U.S. market, reported double-digit sales drops. GM said sales sank 16 percent in September vs. a year ago. At Toyota and Ford, sales were down 32 percent and 34 percent respectively. Chrysler's sales eroded 33 percent.

Auto sales is typically one of the first sectors to feel the sting of a slowing economy as consumers pull back from big-ticket purchases. September's sales, translated into the closely watched seasonally adjusted annualized sales rate, or SAAR, slipped to 12.5 million. That was the slowest pace since the 1990-91 recession. In recent years, auto sales have boomed, hovering in the 16 million annual range and topping 17 million in 2005. U.S. sales have totaled 10.8 million for the year so far, down 13 percent, according to Autodata.

Industry executives began the year thinking they could sell 15.5 million new vehicles this year. But forecasts have dropped steadily as the year has progressed. "It looks to me like the sales we are experiencing this quarter are well below a normal trough of the auto market," said Bob Schnorbus, chief economist at J.D. Power and Associates. "It sort of crashed the floor," he said.

Schnorbus said there were anecdotal reports from dealers that some consumers who wanted to buy cars were being turned away because they couldn't get financing. He estimated that such problems trimmed the annualized sales rate by 500,000. He said economic problems are being compounded by financial problems, leading to lower sales.

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Car dealers face the grim reaper
October 1, 2008: The credit crisis is slamming sales and sending operating costs for already strained auto dealers through the roof.

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If you want to see how America's credit crisis is hitting the streets of your hometown, go to your local car dealer. Auto dealers depend on credit. They need it to run their stores and their customers need it to buy their products. From every angle, credit trouble hurts. "I'm talking to dealers every day who are just hanging on," said Denny Fitzpatrick, Chairman of the California New Car Dealers Association and owner of Fitzpatrick Chevrolet Hummer in Concord, Calif.

There could be 300 to 400 fewer auto dealerships in America by the end of the year, predicted Paul Taylor, an economist with the National Automobile Dealers Association. In an ordinary year of economic growth, the industry adds 75 to 150 dealers, he said. High gas prices that have turned buyers away from large trucks and SUVs - and all but obliterated Hummer sales - have hurt his business, but Fitzpatrick thinks tight credit is doing even more damage. "We're seeing people with Beacon scores that are pretty darned good," Fitzpatrick said, "and the finance companies are just looking for reasons to turn them down."

Not every car dealer sees the situation as that dire. John McEleney, president of McEleney Autocenter in Clinton, Iowa and vice chairman of the National Automobile Dealers Association, says he understands that things are hard, but his business is holding up fairly well. McEleney owns several dealerships and sells several General Motors brands as well as Hyundai and Toyota cars and trucks. "Probably the most direct effect for me has been availability of retail financing for my customers," said McEleney.

More Credit crisis: Car dealers squeezed from all sides - Oct. 1, 2008

waltky · 11-10-2008, 04:59 AM

Now it's $75 billion...

$75B?!? See the Deal Detroit Is Driving At
November 07, 2008 - Automakers Up Their Ante: Is $75B the New Price of an Auto Bailout?

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The American automobile industry is in danger of collapsing, and it could take as much as $75 billion to save it. That was the urgent pitch that the CEOs of the Big Three automakers –- General Motors, Ford and Chrysler -– made to officials on Capitol Hill yesterday, two Democratic sources who attended last night’s meetings tell ABC News.

Congress has already approved $25 billion in loans for energy-efficient technology for the automakers. Automakers have spoken publicly about wanting $25 billion in loan guarantees but now, sources say the Big Three are upping the ante with a request for $50 billion instead. The sources say the car companies are looking for more than just loan guarantees. They also are looking for help in meeting pension obligations and have suggested an expensive new tax credit to be given to people who buy new cars. "That's a lot of [expletive] money," one senior House Democrat told ABC News, but "they're in deep [expletive]." How deep?

According to earnings information released today, General Motors lost $2.5 billion in the third quarter and spent $6.9 billion in reserves to stay afloat. Ford fared better, with a loss of $129 million, but it spent even more from its reserves: $7.7 billion. Some say that if the companies continue burning through cash at this rate, they have only months to survive. A bankruptcy of even one of the companies would result in devastating job losses. A government bailout, said auto industry analyst Rebecca Lindland of Global Insight, isn't about “just saving the Detroit Big Three…This is saving suppliers and this is saving dealerships."

“This is saving Main Street,” she said.

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