After a year in which U.S. auto sales tumbled 18% and GM had its worst year in nearly a half-century, automakers are reluctant to predict when a recovery might occur.
An even sharper sales decline in December alone means that record high rebates and low-interest financing deals will stick around until at least February, according to an Associated Press report. But those deals will likely disappear as the remaining 2008 models are sold and inventories are lowered to match demand.
One automaker, Hyundai Motor America, is trying to woo skittish buyers by promising to let them return cars for up to a year if they lose their jobs and can’t make the payments. Similar bold moves might be necessary throughout the year.
Toyota Motor Corp. said Tuesday that it is suspending production at all 12 of its Japan plants for 11 days over February and March.
The last time Toyota halted production at all its Japan plants was in August 1993, when demand plunged because of a rising yen, and that was for only one day, according to the company.
“We are coping with a slump in global sales,” Toyota spokesman Hideaki Homma said Tuesday. “Demand in the world auto market is so depressed that every model is falling sharply in sales.”
Toyota last year suspended production at its auto plants in Alabama, Indiana and Texas for three months, and shut down output for two days in December at all its North American vehicle factories including five in the United States, one in Canada and another in Mexico.
Chrysler LLC also shut down its plants for a month in December, longer than the usual two-week break, while General Motors Corp. has said it would shut down a plant in Thailand for up to two months.
On Monday (Jan. 5) , automakers said U.S. sales fell to 13.2 million in 2008, down 18% from 16.1 million in 2007. Consulting firm IHS Global Insight predicts that U.S. sales will drop to 10.3 million this year as the economy continues to sputter. In December alone, U.S. sales plunged 36%.
AP reported that most automakers were pessimistic about the first quarter outlook. After that, some were hopeful that President-elect Barack Obama’s stimulus package would kick in, coupled with a loosening of credit that could bring people back to the showrooms.
Every major manufacturer reported drops of more than 30% in December. Leading the largest year-over-year drop since the Arab oil embargo days of 1973-74 was struggling Chrysler LLC, which sold 53% fewer vehicles than last December and 30 percent fewer in 2008 than in 2007.
Even Toyota and Honda Motor Co., which earlier in the year had seen increases, saw declines in December that were larger than their U.S.-based competitors’. Toyota was down 37% and Honda 35%, compared with Ford Motor Co.’s 32% drop and GM’s 31% slide. Nissan Motor Co. sales also dropped 31%.