Domestic Auto Sales Skid to Lowest Rate in 2 Years

The recession and war cut deeper into the automobile markets in January as sales of domestically built cars and trucks tumbled 28% to match their lowest annual rate in at least two years.

The decline was almost across the board as every category of producer reported steep falloffs, and analysts and auto executives saw no sign of an upturn soon.

Vehicles built in the United States sold at a seasonally adjusted annual rate of 8.8 million, compared to 9.3 million in December, according to formulas used by the U.S. Commerce Department.

“The market is clearly in distress,” said auto analyst Clifford Swenson of Jacobs Automotive, a New Jersey-based consulting group.

Toyota and Honda, which have traditionally weathered soft markets better than the Big Three U.S. auto makers, posted significant declines for the month. As a group, Japanese-brand vehicles built in this country declined 16% while the Big Three U.S. firms fell 29% from the same month a year earlier. Imports dropped 29%.

For the final 10 days of January--the first period to fully reflect the impact of the outbreak of war on Jan. 16--domestic sales fell 36%, including a 38% drop by the Big Three and a 25% falloff by foreign-based U.S. producers.

Auto executives, analysts and dealers blamed the decline in consumer confidence triggered by the recession and reinforced by the Gulf War for further weakening a market that has been lethargic since August.

Chris Cedergren, an analyst with J. D. Power & Associates in Agoura Hills, said the pace of auto sales will not pick up until the conflict in the Gulf is resolved.

AUTO SALES Seasonally adjusted annual rates for sales of domestically produced cars and trucks, including those built in the United States by Japanese automakers. The figures use seasonal patterns to predict the auto industry’s sales rate over a full year.

Source: Commerce Department