China Resources Power (TG:CRP)
Historical Stock Chart

From Jun 2019 to Jun 2024

(Updates with GM sales data)

The U.S. auto industry closed out its worst year in more than 15 years - with an even weaker 2009 expected ahead of it - as General Motors Corp. (GM) reported a 31% drop and smaller rivals reported similar declines for the fourth-straight month in December.

The grim numbers underscore how matters went from bad to worse in 2008 for auto makers as jittery consumers stayed out of showrooms.

As sales plunged, the Detroit Three had to ask Congress for government help to avert financial disaster. Washington agreed to a $17.4 billion loan package for GM and Chrysler LLC under the Treasury Department's Troubled Asset Relief Program.

But the entire industry, including Japan's Toyota Motor Corp. (TM) and Honda Motor Co. (HMC), is now reeling from the spiraling effects of the U.S. housing crisis, tight credit and worries about a lengthy recession.

In recent trading, Ford shares were up 4.9% at $2.58 while GM gained 4.6% to $3.82. Honda dropped 1.3% to $21.53 and Toyota fell 10 cents to $66.27.

GM, the nation's largest auto maker, said it sold 220,030 light vehicles in December, compared with 319,837 a year ago. There were 26 selling days in December, the same as a year earlier.

Car sales dropped 25%, while light-truck sales dropped 35%.

Inventory, which became bloated in recent years as consumers turned away from the larger pickup trucks and sport utility vehicles to embrace smaller, more fuel-efficient vehicles, dropped 4%.

GM's U.S. light-vehicle sales for the year fell 23% to 2.95 million.

Amid the miserable sales environment, GM and other auto makers have been cutting production. GM said it now expects first-quarter production of 420,000 vehicles, down 53% from a year ago, and 180,000 fewer vehicles than its previous forecast. In mid-December, GM said it would idle about 30% of its North American assembly plant volume and cut first-quarter production by about 250,000 vehicles because of slumping sales.

At Toyota, December sales fell 37% to 141,949, the eighth-straight month of sales drops for the nation's second-largest auto maker, which had once consistently defied the negative sales trends that have slammed Detroit.

Owing to the global economic slowdown, the world's largest auto maker recently announced it would suffer its first operating loss in 70 years and is postponing the completion of a new assembly plant in Mississippi and cutting production at several U.S. factories and other overseas markets. The company's U.S. sales decline for the year was 16% to 2.22 million.

Ford took an optimistic view of December's results, noting that its December market share rose to 14.6%, up 0.7 percentage point from a year ago - the first time since 1997 it had achieved a market share increase for three straight months.

"This is a strong ending to ... a very challenging year," said marketing chief Jim Farley. Ford projected a fourth-quarter 15% market share for Ford, Lincoln and Mercury - beating the year-ago figure for the first time since 2001, it said.

Ford, the No. 3 U.S. auto maker by sales behind GM and Toyota, said it sold 138,325 light vehicles in December, down 32%. Retail sales for the Ford, Lincoln and Mercury brands fell 27%, while lower-margin fleet sales dropped 42%, including a 57% decline in daily rental sales.

For 2008, Ford's sales fell 21% to 1.98 million vehicles.

Ford, Lincoln and Mercury car sales fell 26% to 43,087 in December, while truck and van sales fell 30% to 54,295 amid a 25% drop for the F-series pickup. SUV sales slumped 52%.

Meanwhile, Honda's December sales slid 35% to 86,085, putting the year's total down 8.2% at 1.43 million. Nissan Motor Co. Ltd. (NSANY) posted a 31% decline for the month to 62,102 as 2008 sales dropped 11% to 951,350.

Chrysler will report December sales figures later Monday.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary. You can use this link on the day this article is published and the following day.