Car sales hit another pothole in September
Car and truck sales slumped again in September, putting the industry on track to chalk up the worst year for new-vehicle sales in nearly a decade.
Uncertainty about the U.S. economy and the weak housing market helped put the brakes on buying for the fourth straight month.
The September slide of 3% came after a less-than-1% drop in August, a month that was considered surprisingly robust. July sales were down a sharp 12.3% and in June they fell 3% compared with a year earlier.
Analyst Jesse Toprak of auto site Edmunds.com said that if cars and trucks continued selling at the pace recorded this year, full-year sales would be about 16.2 million, the fewest since 1998.
In September, Ford Motor Co. again led the decline with a 21% drop compared with September 2006, according to research firm Autodata Corp. It was the fifth consecutive month of double-digit declines for the maker of the Ford, Lincoln and Mercury nameplates and contributed to a 14% drop in its sales year-to-date.
Toyota Motor Corp., which has surpassed Ford in U.S. auto sales the last three months to claim the No. 2 spot in the market, posted a drop of 4.4%. General Motors Corp., No. 1 in the U.S., followed a strong August with a slim 0.5% gain. Sales at No. 4 Chrysler fell 5.4%.
Honda Motor Co. and Nissan Motor Co. bucked the trend with increases of 9.4% and 6.7%, respectively. Both illustrated a key theme for the month: Newer is better.
Sales of the 2008 Honda Accord sedan, boasting its first overhaul since 2003, were up 27% to 34,802 units -- although it still trailed the Toyota Camry, the bestselling passenger car in America. And sales of Nissan’s redesigned Altima sedan were even stronger, jumping 37%.
Other new or redesigned vehicles that found favor with buyers were the Buick Enclave crossover, the Cadillac CTS and Mercedes-Benz C-class sedans, and GM’s Chevy Tahoe and GMC Yukon sport utility vehicles.
“The overall theme was that new product ruled and redesigned or freshly introduced vehicles basically grabbed the limelight,” Edmunds.com’s Toprak said. “That kept the momentum somewhat positive in a month where we saw a downward trend in automotive sales.”
(The sales figures aren’t adjusted for year-to-year differences in selling days. There was one fewer selling day last month than in September 2006.)
Economists watch the auto numbers for signs of where the U.S. economy is heading, and saw more of the same in September.
“If sales are falling, it’s not proof that the economy is unraveling into a recession -- but it is proof the economy is struggling,” said Mark Zandi, chief economist with Moody’s Economy .com.
Automakers drew some encouragement from the results, considering the market climate.
“Given September’s economic head wind, the industry saw a fair month,” said Jim Lentz, executive vice president of Toyota Motor Sales USA. Inc. in Torrance. He said Toyota hoped for “modest gains” in the fall when the market should stabilize.
One factor holding down sales has been the automakers’ reluctance to pile on incentives to lure buyers. Despite predictions all summer that slow traffic in the showrooms signaled big clearance sales ahead, incentive spending by the car companies is down 10% from last year, Toprak of Edmunds.com said, although certain models such as the Dodge Ram pickup have seen heavy discounting.
At this late date in the year, he added, companies aren’t likely to launch a wave of special deals for bargain hunters.
But Beau Boeckmann, vice president of giant Ford dealer Galpin Motors in North Hills, said he expected Ford to boost incentives and ad spending to lift sales before the end of the year.
“We see an increase in market share for the fourth quarter,” Boeckmann said.
European luxury nameplates such as Porsche, BMW, Mercedes-Benz and Land Rover all posted positive results. Wealthy car buyers are less affected by high gas prices and credit woes, Toprak said. Also, luxury cars tend to be mostly leased -- in Southern California lease rates can run higher than 70% for some European makes -- and leasing tends to take less of a hit during shaky economic times.
Analysts said last month’s sales weren’t affected by the two-day strike against GM by the United Auto Workers.
GM’s stock rose $1 to $37.05; Ford shares gained 34 cents to $8.57.
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