Weak car demand remains constant

December 3, 2008 at 12:00a.m.

Cobalt sales fell 54 percent last month, nationwide, and are slow locally as well.

STAFF/WIRE report

General Motors’ November U.S. sales plunged 41 percent, while Ford’s dropped 31 percent, crushing hopes that the industrywide drop in vehicle demand might be easing as Detroit’s automakers prepare to state their second case for a federal bailout.

Their overseas rivals posted abysmal results Tuesday as well. Toyota’s November U.S. sales tumbled 34 percent, and Honda’s fell 32 percent.

A dreary economy, weak consumer confidence and tight credit markets have combined to keep consumers out of vehicle showrooms this year. On Monday, the National Bureau of Economic Research said the U.S. entered a recession in December 2007, much earlier than most predictions.

Barry Gonis, general manager of Spitzer Chevrolet in North Jackson, said news of GM’s financial crisis could be scaring off car buyers. He thinks car buyers would return to showrooms if Congress approves loans for the automaker.

Spitzer Chevrolet sold 55 new and used vehicles last month, compared with 64 in November 2007.

Sales of the Chevrolet Cobalt, which is made in Lordstown, remain slow, Gonis said. He added that he is surprised the cars are not moving faster with their $1,500 rebate offer but that perhaps falling gasoline prices have sapped the demand that was building earlier this year.

Nationwide, GM saw Cobalt sales slump 54 percent last month. It sold 6,312 Cobalts in the U.S. last month, compared with 13,629 in November 2007. Last month’s total was 166 cars below the number sold in October.

For the year, Cobalt sales are down 4 percent at 175,259.

Sales of the Pontiac G5 were down 50 percent last month. It is the sister car to the Cobalt and also is assembled in Lordstown.

GM sold 1,083 G5s last month, compared with 2,170 in November 2007. For the year, G5 sales are down 10 percent at 22,975.

Many analysts had expected November sales to come in slightly better than October sales, noting that aggressive incentive spending and the plunge in gasoline prices may have put a floor under sales. But GM, Ford, Toyota and Honda Motor Co. all posted month-over-month sales declines, pointing to a potential industrywide drop.

GM reported a 44 percent drop in demand for cars compared with last November, while light truck sales dropped 39 percent.

“In November we saw the continuation of the dramatic decline in volume for the industry,” Mark LaNeve, GM’s vice president of North American sales, said in a statement released by the company. “Every manufacturer is posting awful numbers, and we are no exception.”

Jim Farley, Ford Motor Co.’s group vice president of marketing, said he expects the industry to post continued year-over-year declines in auto sales until at least the second half of 2009.

“We could see some strengthening in the second half of next year, or at least some stabilization, albeit at a much lower level,” Farley said in a conference call with analysts and reporters.

Farley said sales began November at an improved rate but began skidding around midmonth, coinciding with the Detroit Three’s presentation to Congress for $25 billion in loans. But he cautioned that numerous factors worked together to hobble sales.

“The talk of the bailouts and the bankruptcies and all the uncertainty and job loss has obviously done little to bolster consumer confidence,” Farley said.

Dearborn, Mich.-based Ford said light truck sales for its namesake brand, Lincoln and Mercury were off 29 percent compared with November 2007, while the three brands’ car sales were down 32 percent.

Chrysler saw its November sales plunge 47 percent. Demand for cars fell 59 percent, while truck sales were down 42 percent.

Toyota Motor Corp., Japan’s No. 1 automaker, said truck sales plummeted 36 percent, while demand for passenger cars fell 32 percent, despite the automaker’s extension of zero-percent financing on a dozen vehicles through the end of the month.