U.S. auto sales plunge but bottom seen near
U.S. auto sales fell 37 percent in March, a smaller-than-expected drop that encouraged hope that the world’s largest car market is nearing a bottom after a freefall that has pulled the industry into a deepening crisis.
General Motors Corp, which has until June to complete a new restructuring under federal oversight that could push it into bankruptcy, said its sales fell 45 percent, the largest decline of any of the major automakers.
Industry-wide sales fell for the 17th consecutive month but were up from February with the help of record discounts and higher sales to fleet operators such as government agencies.
Auto sales typically account for as much as a fifth of overall U.S. retail sales and industry executives held out hope that the market would hit bottom over the next quarter or so.
“I think we’re seeing maybe the first signs of a brightening in the outlook for the auto industry in March,” GM chief sales analyst Mike DiGiovanni said on a conference call.
Sales for Ford Motor Co, the only U.S. automaker operating without government aid, dropped 41 percent.
Major Japanese automakers and Chrysler LLC posted sales declines ranging between 36 and 39 percent.
Overall sales were almost 9.9 million vehicles on the annualized rate tracked by analysts, down sharply from the average near 16 million over the past decade business card.
“We believe we may be at or near the trough of the industry’s year-to-year comparisons but do not see an uptick in industry demand before (the fourth quarter) at the earliest,” said Efraim Levy, an equity analyst with Standard & Poor’s.
Shares in Toyota Motor Corp, Honda Motor Co, Nissan Motor Co and other Japanese automakers jumped as investors reacted to the better-than-expected results.
“Share prices are looking for a new direction, so they reacted positively to the U.S. sales results,” UBS Securities analyst Tatsuo Yoshida said, although he said the year-on-year decline was still staggering and the annualized sales rate extremely low.
Toyota rose 5.8 percent, Honda gained 8.9 percent and Nissan put on 9.6 percent in Thursday morning trade in Tokyo.
DISCOUNTS HIT RECORD
Discounts in the United States hit a record in March, averaging $3,169 per vehicle based on the value of offers including rebates and zero-percent financing, auto website Edmunds.com said.
Both GM and Ford began rolling out new sales programs intended to win over car shoppers worried about losing their jobs by promising to cover loan payments if that happens.
Filed under: finance by Wolf