GM, Ford, Honda, Toyota Drag Industry to 36% Decline

General Motors, Ford Motor Co., American Honda and Toyota Motor Sales U.S.A. all reported sales declines of more than 31 percent in December as the U.S. auto industry capped its worst year since 1992.
 

GM's plunge dragged its annual total to levels not seen since 1959, and Ford's year-end total was the lowest since 1961. American Honda and Toyota were down more than 30 percent for the second straight month, and Nissan North America for the fourth. Chrysler LLC dropped 53.1 percent.
 

The industry's December total fell 35.6 percent from year-earlier levels despite rising incentives. It marked the fourth-straight monthly tumble of more than 25 percent amid the longest U.S. recession since the early 1980s and a national debate over whether the federal government should rescue GM and Chrysler.
 

Automakers' average incentive rose to $2,902 per vehicle in December, according to Edmunds.com. That's up 8 percent from November and 18 percent from the year-earlier figure.
 

"People are not ready to make those big-ticket purchases," said Stephen Spivey, a Frost & Sullivan analyst, in an interview. "They want to see if they have a job next week, next month, next year."
 

The results topped the forecasts of some analysts who had projected that sales on an annual basis would drop below 10 million. December's preliminary 10.4 million seasonally adjusted rate was up from November's 10.3 million, the lowest in 26 years.
 

For the year, U.S. sales fell 18 percent to a preliminary total of 13.2 million, down from 16.2 million in 2007. It was the lowest annual figure since 1992, when the U.S. was pulling out of another recession.
 

Among the five biggest automakers in the United States, GM's 31.2 percent December decline was the least severe. The company was aided by demand for the Chevrolet Malibu and Buick Enclave. Toyota, which placed No. 2 in the U.S. ahead of Ford for the second straight year, fell 36.7 percent for the month. Ford was down 34.4 percent.
 

Chrysler hung on to its No. 4 ranking in U.S. sales, about 24,000 units ahead of American Honda. Honda was down 34.7 percent in December.

Solvency issues
 

Some analysts figured buyers would shun GM and Chrysler because of questions about their solvency. President George W. Bush approved $17.4 billion in federal loans for the two automakers on Dec. 19
 

Last week, the U.S. Treasury Department also allocated $6 billion to GM's affiliated lender, GMAC Financial Services. That move spurred GM and GMAC to shake a global credit crunch by expanding auto lending and incentive programs for the last sales days of the month.

Ford, which borrowed more than $23 billion in 2006, still seeks a $9 billion credit line if the economic downturn lasts longer than it expects.
 

The only other time the U.S. auto industry has seen a 3 million-unit plunge over a single year was during 1974 in the wake of the first oil shock, Ford's chief sales analyst, George Pipas, told reporters last week.
 

"The sales rates have declined like a lead balloon," Pipas said. "We're not looking for the first quarter to be much different from what we saw in the fourth quarter."
 

Ford's U.S. sales for the year dropped 21.8 percent to 2.0 million. That was half the level of 1999 and the lowest since 1961, according to the Automotive News Data Center. Not counting results from Land Rover and Jaguar, which were sold in 2008, Ford was down 31.6 percent in December.
 

GM's 22.7 percent decline for the year put its volume below 3 million for the first time since 1959, when the automaker tallied 2.82 million sales.
 

Ford's Pipas noted on Monday that for the first time since 2000, U.S. passenger cars outsold light trucks. Buyers switched to smaller, fuel-efficient vehicles when gasoline prices soared in spring and summer.
 

The Consumer Confidence Index hit an all-time low in December, according to the Conference Board. The market-information organization has released its index monthly since 1967.
 

Among European automakers, Volkswagen AG was down 13.3 percent in December, Daimler AG plunged 23.5 percent and the BMW Group dropped 35.9 percent.
 

Despite a 7.7 percent December decline, Subaru of America managed to finish just ahead of its 2007 total. Through November, Subaru and Daimler were the only two major automakers to top their previous-year marks. Daimler wasn't able to hold on: Its Smart and Mercedes brands finished the year down 1.5 percent.