March car sales: Light at the end of the tunnel -- or another train wreck coming?
Sales of new vehicles dropped by more than 37 percent in March as the annual sales rate remained below 10 million units – compared to the 17 million trendline, early in the decade, and the more than 13 million sales rung up in 2008.
Surprisingly, automakers saw some signs of life, saying there were indications the big slump that has gripped the industry for the last six months is beginning to reach bottom.
Overall, virtually every car maker saw sales slide last month. As has been the case in recent months, General Motors Corp. reported a 43 percent decline, as the controversy over he company’s future, along with scarce credi,t continued to undermine sales. Chrysler LLC also saw a drop of 39 percent and Ford sales declined 41 percent.
Asian importers haven’t been spared, since last autumn’s sharp plunge, and that trend continued in March, with Toyota sales falling 37 percent, Honda’s off 33 percent and Nissan’s off 38 percent. The Europeans fared a bit better, but not by much, Mercedes-Benz, BMW, Volkswagen and Audi also reporting double-digit declines as sales last month.
The overall sales rate was approximately 9.8 million, on an annualized basis, and even Hyundai reported a drop in sales, after gaining momentum with the January launch of its Hyundai Assurance Program, designed to comfort potential customers fearing the loss of their jobs. Kia sales were essentially flat while Mitsubishi reported an increase in sales.
Looking for a silver lining, Mark LaNeve, General Motors vice president of sales service and marketing, said car sales went up 23 percent between February and March. “I take that as” a very good sign,” LaNeve said.
Bob Carter, Toyota Motors Sales vice president, also noted that in another positive development, sales in California improved over February terrible showing.
“We believe we may be at or near the trough of the industry’s year-to-year comparisons, though we do not see an uptick in demand before (the fourth quarter,) at the earliest. We expect the government stimulus to help (2010) auto sales,” observed a new report from Standard & Poors.
There were even signs of life in the truck market, which has been beaten down over the past year, automakers said. “There is a little bit more light at the end of the tunnel for trucks. The stimulus is already beginning to kick in and it’s going to build,” Chrysler Vice Chairman Jim Press predicted.
Emily Kolinski- Morris said there are some very preliminary signs the economy is beginning to improve. “The indicators suggest we could begin to see some recovery in new vehicle sales in three months. If we’re not at the bottom we’re getting close,” she added, noting that consumer confidence seems to have firmed up, but consumers still seem uncomfortable about coming into the show room.
However, Jim Farley, Ford group executive for sales and marketing, also noted that March closed with a rush, suggesting that the spring selling season could be stronger than expected.