WORLD> America
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WORLD> America
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US auto sales drop to dire level as GM's fall 45%
(Agencies)
Updated: 2008-11-04 08:30 Toyota's no-interest loans gave it an advantage last month over automakers such as GM and Chrysler whose finance companies are having trouble getting access to capital. "This managed to breathe some life into an otherwise lackluster month," said Bob Carter, Toyota Division general manager. But added incentive spending likely will mean automakers, especially Ford, GM and Chrysler, will have to burn up cash at a faster rate to compete in a shrunken market, said Jesse Toprak, executive director of industry analysis for the automotive information site Edmunds.com. "They will have no choice but to be more aggressive if they want to at least be moving some units," he said. Industry analysts are concerned that Detroit-based GM, which burned more than $1 billion per month in the second quarter, may run out of money sometime next year if the auto market doesn't improve. Ford, which has borrowed more money than GM, is also cash-strapped but can last longer, they say. GM's DiGiovanni said no automaker can stay alive in a US market that had the worst year-over-year monthly decline since 1975. "No matter what manufacturer you are, no matter how deep your pockets are, you are going to be affected severely by this," he said. If GM's sales were adjusted for population growth, October would be the worst month of the post-World War II era, DiGiovanni said. It was GM's worst year-over-year monthly decline since 1975, he said. But despite the steep drop, GM's total was enough to keep it ahead of Toyota for the No. 1 US sales spot. GM sold 168,719 vehicles to Toyota's 152,101. Ford likely will announce car and crossover vehicle production cuts when it announces its third-quarter earnings Friday, Pipas said. Truck production cuts earlier in the year have kept inventories low, but car and crossover inventories need to be brought into line, he said. Sales of the company's F-Series pickup trucks, traditionally its top seller, fell 16 percent in October, better than Ford's light trucks as a whole, which dropped more than 30 percent. The company began selling a new version of the pickup last month and has announced plans to add 1,000 workers at its Dearborn Truck Plant in January to handle what it expects will be increased demand. While Toyota offered free financing, and Nissan followed suit with a similar offer on five models starting Tuesday, GM's financing arm, GMAC Financial Services, said last month it tightened its lending standards to require a credit score of at least 700, shutting out some buyers. Mark LaNeve, GM's vice president for North American sales, said steep cutbacks in leasing and lack of available credit accounted for half of GM's year-over-year sales decline. Analysts said GM's employee pricing incentives in August and September likely pulled in buyers who would have waited to purchase cars, further reducing October sales.
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