Rebates help Cobalts go faster

Because of the recession, the Cobalt posted its worst sales year.

STAFF/WIRE

Enticed by rebates, consumers bought twice as many Chevrolet Cobalts last month as they did in either October or November.

General Motors and other automakers reported their third- straight month of large sales declines Monday, but Cobalt sales took a big step toward returning to normal.

GM sold about 12,800 of the Lordstown-built Cobalts in the U.S. last month. Monthly sales have been under 6,500 since October, when credit markets tightened and stock markets fell.

Those two months were the worst for the Cobalt since the Lordstown complex ramped up to full production in 2005. The complex will be closed this entire month to whittle down dealer inventories, and nearly half of the hourly staff will be laid off when it reopens.

December sales picked up because GM placed a $1,500 rebate on the Cobalt, plus it gave dealers some discounts that could be passed on to consumers, said Barry Gonis, general manager of Spitzer Chevrolet in North Jackson.

He predicted another increase in January because on Monday GM replaced the dealer discounts with a $1,000 rebate on each car. This is on top of the previous $1,500 rebate.

Though stronger, Cobalt sales in December were still down 27 percent from the last month of 2007.

Automakers know that consumers who are fighting through a recession need to be enticed, said Aaron Bragman, automotive marketing research analyst for IHS Global Insight in Troy, Mich. Large incentives such as zero percent financing and rebates will continue well into 2009 as automakers try everything they can to boost sales, he said.

Full-size truck incentives ran from $7,000 to $8,000 in December, and Bragman expects that to continue as the economy fails to improve.

“You look in the paper and the deals on brand-new GM pickups are astonishing,” he said. “The discount that you get buys a heck of a lot of gasoline.”

The slowdown that started in October caused Cobalt to post its lowest annual sales total. GM sold 188,045 Cobalts last year, compared with 200,620 in 2007. The Cobalt’s first year — 2005 — was its best year for sales, at 212,667.

The Pontiac G5, the twin of the Cobalt, also had a down year in 2008.

GM sold 25,439 last year, compared with 27,928 in 2007.

Overall, GM sold 220,030 light vehicles last month, a 31 percent drop from December 2007.

That followed sales declines of 45 percent in October and 54 percent in November.

GM, which said its market share held steady at 22 percent for the year, said its December car sales totaled 87,506, down 25 percent from the year-ago period.

But the total included a 43 percent jump in Malibu sales and a 19 percent increase in Impala sales.

December light-truck sales fell 35 percent to 132,524 units and included a 66 percent plunge in demand for the TrailBlazer SUV and a 34 percent drop in Sierra sales.

Meanwhile, U.S. sales of Toyotas and Hondas fell more than their U.S. competitors’ in December, with Toyota’s 37 percent decline and Honda’s 35 percent drop showing the Japanese company’s popular fuel-efficient models were little help as consumers steered clear of showrooms due to the dismal economy.

Ford Motor Co.’s U.S. sales fell 32 percent in December, while Chrysler sales were down 53 percent.

Ford’s annual sales fell 21 percent from 2007, keeping the automaker in third place in the U.S. auto sales race, falling behind Toyota Motor Corp. for the second straight year.

Toyota’s 2008 sales fell 16 percent to 2.22 million, compared with Ford’s 1.98 million. GM’s 2008 sales totaled 2.95 million, down 23 percent from the year before. Honda Motor Co.’s 2008 sales fell 8.2 percent.

Subaru of America Inc. said its U.S. sales crept higher in 2008, poising the Japanese company to be the only major automaker with a yearly sales increase.

Subaru’s U.S. sales rose by 0.3 percent to 187,699 vehicles from 187,208 in 2007, as consumers snapped up its top-selling Forester and Impreza models.