The continuing severe sales declines have hit the automakers like a January snow storm. These numbers are the percentage of sales this year versus last year. Consumer confidence has taken a steep decline. Consumers are concerned with the economy, job losses and their ability to make payments. Consumers ability to get loans have also factored in the sales declines.
- Chrysler's down 55%
- General Motors down 49%
- Ford down 40%
- Toyota down 32%
- Nissan down 30%
- Honda down 28%
There were positive reports from two manufacturers. Hyundai has a creative incentive for its customers. Hyundai will cover a new vehicle's depreciation if customers return a car within 12 months because they are unable to make payments due to a job loss etc.
- Hyundai up 14%
- Subaru up up 8%
GM and Chrysler are required to submit a viability plan to congress by Feb. 17 in order to get additional financial aid from the government. The automobile business is a capital intensive business and severe sales declines impact their ability to operate. The American auto manufacturers are not currently well capitalized. Few businesses can take severe sales declines without a substantial balance sheet and the cash to endure this downturn.
