Auto sales plunge in Jan.; Chrysler drops 55%, GM 49%, Ford 40%
DETROIT -- All three Detroit automakers saw steep drops in U.S. sales in January, with Chrysler down 55% from a year earlier, General Motors GM down 49% and Ford Motor f down 40%, as consumers remained reluctant to spend and rental-car companies and other bulk buyers reduced their purchases.
Toyota Motor's TM sales of its cars and trucks in the United States declined 32%, Nissan's NSANY dropped 30% and Honda's HMC fell 28%, putting the overall industry on track for its fourth straight month in which U.S. sales plunged 30% or more.
But Subaru bucked the trend of declines for a second month in a row, posting an 8% sales increase, and Hyundai said its sales jumped 14%.
Chrysler had projected that U.S. light vehicle sales for all automakers would fall to 11.1 million this year, but on Tuesday lowered that estimate to 10 million, if the same sales trends continue throughout the year. The automaker cited the tight credit markets that have restricted all kinds of lending.
Meanwhile, GM and Chrysler, racing to cut costs and shed workers, each were starting new r ounds of buyouts and early retirement packages for their union workers. Both automakers must present outlines of plans to become viable in the long term to the federal government by Feb. 17, under the terms of federal bailout loans they received.
Sales of all three of Chrysler's brands tumbled in January. Chrysler-branded vehicle sales fell 69%, led by the PT Cruiser, which saw sales fall 80%. Jeep vehicle sales fell 49%, led by a 71% drop in sales of the Jeep Commander. However, the Jeep Wrangler posted a sales gain of 4%. Dodge sales fell 50%, led by a 99% drop off in Dodge Magnum sales.
Chrysler also said that in January it slashed by 80% bulk sales of cars to rental-car companies, governments and businesses. So-called fleet sales tend to erode both profit and the residual value of vehicles.
GM attributed much of its sales decline to an 80% drop in fleet sales.
GM's retail sales were down 38% for the month but its retail market share held steady compared with December, the company said.
"Our retail market share is a bright spot, holding steady above 21% for the second month in a row," Mark LaNeve, vice president for GM North America vehicle sales, service and marketing, said in a statement.
Ford estimated its share of the January retail market was 12.7%, up 0.3 percentage points from a year earlier. It was the fourth consecutive month that the automaker increased its retail market share.
"During the last four months, retail demand appears to have stabilized, and the strength of our new products is a key reason we're growing our share in these challenging market conditions," Ken Czubay, Ford vice president of sales and marketing, said in a statement. "We expect new, recent and future fiscal and monetary actions to help improve conditions in the second half of the year."
Sales of all Toyota vehicles suffered, the company said. Toyota's Yaris performed the best, but Toyota still sold 7.2% less than it did last January. Even Toyota's Camry, the company's highest volume vehicle, reported a 34.2% sales decline.
GM was expected to announce new buyouts and early retirement packages Tuesday that include $20,000 cash payments and $25,000 new vehicle vouchers, people familiar with the plan told the Detroit Free Press. Most of GM's 62,000 United Auto Worker members are expected to get the offers.
Chrysler also is offering new buyout and retirement packages to most of its UAW members, the automaker said in a statement Monday.
Chrysler will offer $50,000 and a vehicle voucher for people with enough seniority to be eligible for retirement. Others will be offered $75,000 and a vehicle voucher, a person familiar with the offers said.
Contributing: Jewel Gopwani, Detroit Free Press