January Auto Sales Provide Dismal Outlook

Feb 8
13:01

2009

Joe Kent

Joe Kent

  • Share this article on Facebook
  • Share this article on Twitter
  • Share this article on Linkedin

More bad news for the auto industry, as sales have been reported for the month of January. As expected, consumers were still skittish about venturing to car dealerships. Sales of cars and trucks in the U.S. plummeted 37% overall, creating a grim picture of the yeah ahead.

mediaimage
The economy is facing a long road ahead,January Auto Sales Provide Dismal Outlook Articles and car dealers and the automakers are struggling to maintain momentum. Consumers don’t have the spare cash on hand to afford new cars. Meanwhile, Pontiac Pittsburgh know all too well that financial institutions are simply not eager to lend money, hampering car dealers’ ability to sell more cars.

General Motors sales fell 49% in the month of January, creating a terrible start for the embattled automaker as it's busy reorganizing. Additionally, Chrysler, who also is undergoing organizational changes, saw sales fall to about half the amount from what they were last January.

Japanese automakers were a little more fortunate than domestic automakers, but certainly not immune to the dearth in consumer confidence, acknowledges one Pittsburgh Honda dealer. Toyota and Nissan sales dropped by about 30% in January.

To put these sale declines into perspective, in January 2008 the automotive industry sold a total of just over a million cars. January 2009 saw that number drop to 656,976. That’s a huge drop in new car sales, and as each month passes, those numbers seem to be on a slow yet steady decline. The total sales in January are the worst since June of 1982.

Although consumer spending is down, Westminster Toyota dealersays there are other areas that weighed heavily on the automotive industry. Specifically, fleet sales and rental car sales have plummeted, as businesses are cutting back, and consumers are traveling less. While fleet sales are typically low-profit, they make up a substantial chunk of overall sales. Declines in fleet purchases also means that more inventories may be sitting idle warns Orlando Chevrolet dealers. In fact General Motors saw a decline of about 80% in January - the lowest fleet sales level since the mid 1970s!

With numbers for January of 2009 already looking grim, many dealers and industry analysts are expecting it to be a bad omen, and a sign of a long and tough year ahead. Sales need to be improved to facilitate the success or reorganization plans underway at the Big Three automakers, but Newark Ford dealers and others wonder if that is possible in the near-term.

Despite the grim picture, there are plenty of dealers like Hartford Nissan dealers that remain optimistic. Regardless of low sales, January is normally a low sales month. Additionally, it is hoped by Louisville Chevy that the stimulus provided to the automakers by the federal government, and loosened credit, will give the Big Three in particular the ability to do business more effectively in the long run.

Among the ways the automakers and dealers are dealing with the sluggish sales is by offering incentives to car buyers. Specifially, car buyers can expect employee pricing at Hartford Chrysler dealers and other Chrysler stores, while dealers may be offering zero percent financing such as at Kingston Toyota dealers. Many buyers can also get their hands on cash back incentives. These are all efforts to entice consumers into showrooms, and thus far it has had a marginal effective overall.

Despite declines, there have been some automakers that have seen gains in January. Among these few instances is Hyundai, which posted a 14% sales increase. Hyundai is currently offering a unique incentive, providing new car buyers with the Hyundai Assurance Program, enabling consumers to return their vehicles should they lose their job or otherwise cannot make the payments. It is hoped that this program may help spur sales among frugal new car buyers at Hyundai Boston and elsewhere as the economy weighs heavily on consumers' minds.

Another automaker that saw gains in January was Subaru. Driven largely by its recently redesigned 2009 Subaru Forester, which saw sales gains of about 115%, Subaru has seen its second straight month of sales gains.

Other sales numbers include a 32% dip for Toyota, a 30% decline for Nissan, and a 28% drop for Honda.