Last month, U.S. light-vehicle sales declined 26.6 percent, and industry executives glumly predict that a turnaround won't occur until 2010.
Some analysts expect that U.S. sales this year could be as low as 13.0 million cars and trucks, a precipitous downturn from last year's 16.2 million. Next year won't be any better, predicted Ford Motor Co. CEO Alan Mulally.
"We won't see a recovery until 2010," Mulally told reporters at the Paris auto show last week.
General Motors COO Fritz Henderson was just as downbeat: "We are all under some pressure until 2010."
In September, U.S. sales dipped below 1 million units in a month for the first time since February 1993. And — uncharacteristically — the carnage was spread fairly evenly. No one was spared from a toxic mix of high gasoline prices, nationwide job losses and Wall Street's financial crisis.
Standard & Poor’s: 14.0 million
Edmunds.com: 14.0 million
J.D. Power: 13.5 million
Global Insight: 13.5 million
CSM Worldwide: 13.2 million
Stephens Inc.: 12.0 to 13.4 million
Toyota stumblesAfter Toyota Motor Sales U.S.A.'s sales declined 32.3 percent in September — its worst sales downturn in 20 years — Toyota unleashed a 0 percent financing program for 11 models.
Unlike the Detroit 3, Toyota has a captive finance company that still has ready access to capital for leases and consumer loans. Nevertheless, floor traffic dropped sharply for most Toyota and Lexus dealers at the end of September.
Luxury-car customers seemed to be particularly affected by the news about the credit crunch, said Don Esmond, Toyota Motor Sales' senior vice president of automotive operations.
"I think it certainly put the brakes on the consumers," Esmond said during a conference call with reporters last week. "We saw that particularly on the luxury side, where you had folks calling up and asking for deposits back because they lacked confidence."
Just how bad were the sales results? GM suffered a 15.6 percent downturn — and bragged about it. "In the headwind of a difficult and challenging environment, our relative performance was outstanding," said Mark LaNeve, GM's North American sales chief.
To prop up sales, GM included some 2009 models in its employee-pricing incentive for consumers. That helped the Chevrolet Silverado pickup, which topped 50,000 units in September — the industry's best-selling nameplate.
GM also dumped 10,000 Chevrolet Malibus into the daily rental fleets, accounting for more than half of total Malibu sales last month.
No sugarcoatingStill, it's hard to sugarcoat the industry's worst sales month in 15 years.
The credit crunch, which has dried up lease deals and loans to subprime consumers, will slow down any recovery over the next year or so, predicted Bob Schnorbus, an industry analyst for J.D. Power and Associates.
Schnorbus predicted 2009 U.S. light-vehicle sales of 13.5 million units, which would be the industry's worst performance since 1992.
"That drag is likely to continue for the rest of the year regardless of the rescue package" for banks and lenders, Schnorbus said. "Once you get pent-up demand, you can get a nice (recovery). But that's going to be awfully hard to do over the next year because of the problem of getting credit to customers."
That's disquieting news for dealers.
The credit crunch has even begun to affect consumers with strong credit ratings, said Jim Weisbecker, general manager for Belle Glade Chevrolet in Belle Glade, Fla.
"In the past, we were accustomed to financing 70 to 80 percent of our cars sold," Weisbecker said. "Now we finance about 20 percent, if that. It has been a drastic turnaround."