U.S. auto sales sink to worst level since 1982

updated 7:49 p.m. ET Dec. 2, 2008

NEW YORK - U.S. auto sales plunged 37 percent in November to their worst level in more than 26 years, dashing expectations that this dismal year for vehicle demand had found a bottom, and adding more ammunition to the Detroit automakers’ case for a congressional lifeline.

“Our industry is in a much more severe situation than the rest of the economy,” said Mike DiGiovanni, General Motors Corp.’s executive director of global market and industry analysis. “We cannot continue at these levels or else the entire industry is going to go down.”

U.S. auto sales in November fell to 746,789, according to Autodata Corp. On a seasonally adjusted basis, automakers reported an annual sales rate of 10.2 million units, the lowest level since October 1982.

Automakers and analysts blamed the crumbling economy, less access to vehicle financing, and a wait-and-see approach among consumers more preoccupied with the value of their homes and the fate of their jobs than the lure of a new car.

“Consumers (are) not showing up at the dealerships — regardless of the deals they’re being offered and regardless of how low the gas prices go,” said Jesse Toprak, executive director of industry analysis for the automotive Web site Edmunds.com.

Every major automaker reported a year-over-year sales decline of more than 30 percent when they released their results Tuesday. The Detroit carmakers were among the worst hit, with GM’s U.S. sales falling 41 percent and Chrysler LLC’s dropping 47 percent.

Their overseas rivals posted abysmal results as well. Toyota’s sales tumbled 34 percent, while Nissan’s dropped 42 percent and Honda’s fell 32 percent.

The dreary reports came the same day the Detroit Three sent reports to Congress detailing why they are worthy of billions of dollars in emergency loans.

GM said it needs $4 billion this month and a total of $12 billion by late March to keep operating, while Chrysler is asking for $7 billion by year’s end. Ford Motor Co. wants a $9 billion standby line of credit, though it has said it has enough cash to get through 2009 and may not have to touch the government’s money.

Few analysts expected November’s sales numbers to be quite so low, predicting lower gas prices and higher incentive spending by automakers eager to make deals put a floor under sales. Incentive spending rose 15.2 percent from last November, according to Edmunds, while gas prices have plunged by more than half from their hall-time highs this summer.

But those factors did little to bring nervous consumers into showrooms. Jim Farley, Ford’s group vice president of marketing, said he expects the industry to post continued year-over-year sales declines until at least the second half of 2009.\

“We could see some strengthening in the second half of next year, or at least some stabilization, albeit at a much lower level,” Farley said in a conference call with analysts and reporters.

Despite its 31 percent sales drop in November sales, Ford’s market share grew 1 percentage point, helped by a recovery in its pickup truck segment and demand for the Ford Fusion sedan. Sales of Ford’s top-selling F-Series pickups dropped 19 percent, significantly less than most of the automaker’s models.

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