- The Washington Times - Tuesday, November 4, 2008

DETROIT | General Motors‘ October U.S. sales plunged 45 percent, and Ford’s and Chrysler’s weren’t far behind, as low consumer confidence and tight credit combined to bring the industry’s sales to the lowest level in 25 years.

Automakers sold 838,156 vehicles in October, 32 percent less than the same month last year and the worst performance since January 1991, according to Autodata Corp. and Ward’s AutoInfoBank. The seasonally adjusted annual sales rate of 10.6 million vehicles was the lowest since February 1983.

“It’s really an unsustainably weak level for all manufacturers,” said Mike DiGiovanni, GM’s executive director of global market and industry analysis. “This is clearly a severe, severe recession for the U.S. automotive industry and something we really can’t sustain.”

The annual sales rate in October 2007 was 16.1 million.

Chrysler’s sales tumbled 35 percent, and Ford’s dropped 30 percent. Toyota’s sales fell 23 percent despite its zero-percent financing offer, and Nissan and Honda posted 33 percent and 25 percent declines, respectively.

Overall, General Motors Corp. sold 168,719 vehicles in October, while Ford Motor Co., including its Volvo brand, sold 132,278 light vehicles and Chrysler LLC’s sales totaled 94,530 units.

If GM’s sales were adjusted for population growth, October would be the worst month of the post-World War II era, Mr. DiGiovanni said.

“Clearly we’re in a very dire situation,” he said. Detroit-based GM said its light-truck sales tumbled 51 percent compared with the same month last year, while demand for passenger cars fell 34 percent.

Despite the steep drop, GM’s total was enough to keep it ahead of Toyota Motor Corp. for the No. 1 U.S. sales spot. Toyota, which rolled out an offer of zero-percent financing during the month, sold 152,101 vehicles.

Ford officials said on a conference call with reporters and industry analysts that as bad as October sales were, it’s probably not the bottom.

Jim Farley, Ford’s group vice president of marketing, said it’s likely auto companies will start their year-end sales promotions early to try to drum up business, although he would not say what steps Ford would take.

GM said it will start its annual “red tag” sale Tuesday, with lower pricing and customer cash back on most of its new models. The sale typically begins later in the year.

Chrysler said it would continue incentive programs introduced in November that include cash rebates of up to $6,000 and discounted financing on remaining 2008 model year vehicles.

Discussions over potential government funding to facilitate a General Motors acquisition of Chrysler are on hold until after Tuesday’s election, and the end result likely will be decided by whomever wins the presidential contest, according to a person briefed on the financing details of the negotiations.

General Motors Corp. and Chrysler LLC were still reviewing numerous options to help the deal, including tapping into a portion of the $700 billion federal bailout being administered by the Treasury Department, the person said Monday.

Another person briefed on the talks said that despite reports to the contrary, Nissan Motor Co. is still involved in the discussions, although Chrysler’s majority owner, Cerberus Capital Management LP, would prefer GM as a single buyer.

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