Toyota, Honda lead declines in December auto sales

Toyota and Honda's U.S. sales fell more than their U.S. competitors' in December, with Toyota's 37 per cent decline and Honda's 35 per cent drop showing the Japanese company's popular fuel-efficient models were little help as consumers steered clear of showrooms due to the dismal economy.

Ford Motor Co.'s U.S. sales fell 32 per cent in December, while General Motors Corp.'s dropped 31 per cent. Chrysler LLC and other automakers were to report their U.S. sales for December and 2008 later Monday.

Ford's sales for 2008 fell 21 per cent from a year earlier, keeping the Dearborn automaker in third place in the U.S. auto sales race, falling behind Toyota Motor Corp. for the second straight year.

Toyota's 2008 sales fell 16 per cent to 2.22 million, compared with Ford's 1.98 million. Detroit-based GM's 2008 sales totalled 2.95 million, down 23 per cent from the year before. Honda Motor Co.'s 2008 sales fell 8.2 per cent.

Analysts expected auto sales industrywide to drop up to 40 per cent in December as consumers remain uncertain about the economy and their jobs.

The auto website Edmunds.com predicted sales for the full year will total just over 13 million, down 18 per cent from 2007 and the lowest level since 1992.

Subaru of America Inc. said its U.S. sales crept higher in 2008, poising the Japanese company to be the only major automaker with a yearly sales increase. Subaru's U.S. sales rose by 0.3 per cent to 187,699 vehicles from 187,208 in 2007, as consumers snapped up its top-selling Forester and Impreza models.

Ford said it sold 138,458 light vehicles last month, down from 204,787 in December 2007. But even though its sales were dismal, Ford said it expects to fare better than the industry overall.

Meanwhile, GM sold 220,030 light vehicles compared with 319,837 in December 2007. The recent month's results were boosted by heavy sales incentives, including financing offers announced near the end of the month after the Treasury Department said it would give $5 billion in federal aid to GM's ailing financing arm, GMAC LLC.

The sales slump continues to mean good deals for consumers, though. Aaron Bragman, automotive marketing research analyst for IHS Global Insight in Troy, Mich., said large incentives such as zero-per cent financing and rebates will continue well into 2009 as automakers try everything they can to boost sales.

Full-size truck incentives ran from $7,000 to $8,000 in December, and Bragman expects that to continue all year as the economy fails to improve.

``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.''

One automaker, Hyundai Motor America, is trying to woo skittish buyers by promising to let them return cars free for up to a year if they lose their jobs and can't make the payments.

The ``Hyundai Assurance Program'' applies to customers stricken by misfortune outside of their control, such as losing their job, becoming disabled or losing their drivers license for medical reasons. It covers depreciation up to $7,500.

Similar bold moves might be necessary throughout the year. Global Insight predicts that U.S. sales will drop from 13 million in 2008 to 10.3 million this year as the economy continues to sputter.

While that may bring deals for consumers, it's bad news for the automakers. GM and Chrysler LLC were forced to go to the government for loans to hold off bankruptcy, and Ford says it may need government money if sales don't recover in 2009.

But Bragman said the sales drops are not unique to the U.S.-based automakers.

``This is a domestic market problem because we see the same kinds of declines at Toyota and Honda as we see at GM and Ford,'' he said. ``It's not a matter of getting financing. It's a matter of getting shoppers.''

Toyota said it sold 141,949 vehicles in December, down from 224,399 a year earlier. Sales of the Prius hybrid fell 45 per cent as gas prices fell from their record highs in July.

Honda sold 86,085 vehicles last month, down from 131,792 a year earlier but up from 76,233 in November. The month-over-month improvement was a trend seen by most automakers.

Ford said it sold 43,087 Ford, Lincoln and Mercury cars last month, down 26 per cent from December 2007. The company sold 90,418 Ford, Lincoln and Mercury light trucks in December, 34 per cent fewer than the same month a year earlier.

George Pipas, Ford's top sales analyst, predicted that passenger cars will outsell trucks in the U.S. this year for the first time since 2000 as consumers continue to be wary of high gasoline prices.

Ford said there was a glimmer of hope in its sales figures. Its market share was 14.6 per cent, up 0.7 percentage point from December 2007 and the first time since 1997 that the company has seen its share go up three straight months.

It also sold 195,823 Focus compacts in 2008, the highest total since 2004 and a 13 per cent increase from 2007.

``This is a strong ending to end a very challenging year,'' Jim Farley, Ford's group vice president for marketing, said in a statement.

GM, which said its market share held steady at 22 per cent for the year, said its December car sales totalled 87,506, down 25 per cent from the year-ago period. But the total included a 43 per cent jump in Malibu sales and a 19 per cent increase in Impala sales.

December light truck sales fell 25 per cent to 132,524 units and included a 66 per cent plunge in demand for the TrailBlazer SUV and a 34 per cent drop in Sierra sales.