Toyota Motor Sales Vice President Robert Carter - shown here at a Lexus preview - said Toyota will launch a new wave of incentives.
Sales of new vehicles remained stuck in low gear during April–and actually seemed to tail off towards the end of the month, as consumers were engulfed by bad news like the flu virus and school closings, and the countdown to bankruptcy at Chrysler. Overall sales dropped 34% to an annual rate of just over 9 million units.
Nevertheless, some automakers suggested that sales may have finally bottomed out and Toyota said it was going to raise production of some models despite a 42% drop in sales. Toyota Motor Sales Vice President Robert Carter said Toyota was preparing to launch a new wave of incentives this month.
General Motors, Ford Motor Company, Chrysler LLC, Honda, Nissan and Volkswagen all reported sales declines in excess of 25% last month.
GM’s sales dropped 34%, Ford’s fell 40%, Honda’s decline 24.5%, Nissan fell 37.8%, while Mitsubishi’s sales dropped 55%. Sales by bankrupt Chrysler dropped 48%. Even the Korean carmakers felt the economic chill as Hyundai sales dropped 14% and Kia’s sales dropped 14.8%. Subaru’s sales also fell 7%.
Mercedes-Benz and BMW also reported declines of 29% and 30%, respectively, as the luxury segment continued to shrink. In contrast, much smaller Audi had sales that looked positively robust with a drop of only 9%.
The green number on the board was posted by smart USA, which reported a 2% increase in sales.
Mike DiGiovanni, GM’s general director of market analysis, noted that the gross domestic product in the U.S. dropped by 6% in both the fourth quarter of 2008 and the first quarter of 2009. It was the steepest slide in the U.S. economy since the Eisenhower recession of 1957 and 1958, as TheDetroitBureau.com has previously reported.
Ford economist Emily Kolinski-Morris also said the economy has yet to show any real signs of shaking off the current malaise, despite a recent uptick in consumer sentiment.
Nevertheless, DiGiovanni said he believes the market is poised for a rebound. The numbers on personal income and saving indicate that the cash in available. “Consumers seem to waiting for the cash-for-clunkers-type stimulus,” he said.
The success of programs in Europe suggest the program also will work in the U.S. Bills are pending in Congress, and President Barack Obama has indicated he is amenable to signing it. “It all fits together hand in glove,” he said.
Mark LaNeve, GM vice president for sales service and marketing, said GM did succeed in wooing back some fleet customers during April. Ford also was pleased with the success of its efforts to win back retail customers.
Standard & Poors, part or the company that enabled the mortgage-backed securities debacle that sank the economy, also predicted that Ford would gain from the troubles at General Motors and Chrysler.
“We believe some domestic-oriented shoppers prefer to buy from the relatively more stable brand. We think industry year-to-year comparisons will get easier as the year progresses, but will still show declines through at least third quarter,” S&P said.
Jim Press, Chrysler Vice Chairman and President, said he believed their ample for reason for optimism despite the company’s bankruptcy filing and the anemic sales numbers. “The industry appears to have stabilized, as it’s been fairly level for the past four months,” said Press. “Chrysler retail sales and share were well above expectations, which shows the real strength of our dealers and products in the marketplace in spite of a month filled with troubling headlines,” claimed Press. Chrysler sales were off %48. “This gives us reason for optimism as we begin working on our new alliance and restructuring plans,” Press said.
“There has been so much discussion over the past several weeks about the possibility of bankruptcy for either Chrysler or GM that the two companies’ images may have already reached a low point,” said Tom Libby, a independent consultant and president of the Society of Automotive Analysts.
“That an actual bankruptcy has occurred may not incur that much more damage. Even so, Chrysler and Fiat need to move as fast as possible to emerge from bankruptcy and begin to rebuild.”