Major automakers report U.S. sales plunge

Auto sales started the year slightly under 2007’s pace, but by May, U.S.-based automakers were suffering as gasoline prices started to rise toward $4 per gallon and people shifted from buying pickup trucks and sport utility vehicles to smaller, more efficient cars.

Then, in July, as gas prices neared their peak and the economy started to falter, sales tumbled and never recovered the rest of the year, even though gas subsided to under $2 per gallon.

Lower gas prices have cut into high-mileage gas-electric hybrid vehicles toward the end of the year. Toyota reported sales of the Prius, the top-selling hybrid in the U.S., fell 45 percent last month.

But Lentz was optimistic that hybrid sales would rebound.

“We’re going to see fuel prices creep up a bit,” he said. “I think the overall greening of America is going to see an increase in hybrid (sales) as well.”

GM’s December results were boosted by heavy sales incentives, including financing offers announced last week after the Treasury Department said it would give $5 billion in federal aid to the Detroit automaker’s ailing financing arm, GMAC LLC.

Michael Martin, who owns Chevrolet and Saturn dealerships in Manassas, Va., said he saw customer traffic and phone calls pick up almost immediately.

“I’d like to see (the financing offers) really take hold over the next 30 to 45 days,” Martin said. “Hopefully, we’ll start seeing some real upticks.”

Incentives such as rebates and low-interest financing offered last month were the highest on record for a December, said Jesse Toprak, executive director of industry analysis for the Edmunds.com automotive Web site.

Rebates on full-size trucks were $7,000 to $8,000 in December, and IHS Global Insight analyst Aaron Bragman expects similar incentives as long as the economy is poor.

“You look in the paper and the deals on brand new GM pickups are astonishing,” he said. “The discount that you get buys a heck of a lot of gasoline.”

But Mark LaNeve, GM’s vice president for North American marketing, said he expects sales incentives to drop as GM sells down 2008 models. It still will be competitive in areas such as midsize cars, where Toyota has been offering $3,500 incentives on its top-selling Camry model, LaNeve said.

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