DETROIT -- Detroits automakers may have dragged U.S. auto sales to their lowest levels in 25 years this month as benefits from plunging gasoline prices failed to make up for tight credit and skittish consumers.
The industry will report sales on an annual basis of as low as 11 million vehicles, George Pipas, a sales analyst at Ford Motor Co., told reporters today. His forecast echoes those of analysts including Rod Lache, of Deutsche Bank.
Octobers tumble likely will be the sixth straight of 10 percent or more. It also would extend the industrys decline to 12 months, the longest since a 14-month stretch in 1990 and 1991. Automakers report their October results on Monday.
Showroom traffic continues pretty low, Fords Pipas said.
Ford, General Motors and Chrysler LLC are projected to report drops of at least 35 percent, according to analysts surveyed by Bloomberg News. Last week, Edmunds.com issued a similar forecast for the Detroit 3 and said U.S. sales by the three biggest Japanese automakers -- Toyota, Nissan and Honda -- would fall at least 15 percent.
The declines may not be so severe, Edmunds now says.
The data suggest that the market hit bottom between Sept.15th and Oct. 15th, said Jeremy Anwyl, Edmunds CEO.
Consumers intent to purchase an automobile increased by 10 percent in the second half of the month from the first half, Edmunds says.
Michael DiGiovanni, GMs head of global marketing and industry analysis, said sales could stabilize in the last two months of 2008.
Speaking to reporters this week, DiGiovanni said the stronger U.S. dollar, cheaper oil, declining interest rates, loosening credit and a slight rise in housing starts will help GMs sales.
The United States is in the trough of its downturn right now. The decline in the price of oil itself is like a tax cut. That will be very positive. Inflation is no longer a major concern, DiGiovanni said.
The price of crude oil plunged 36 percent this month, to $64.44 today. Gasoline has dropped 31 percent in the same span, to $2.50 a gallon, according to motorist group AAA. As recently as July 17, gasoline sold for $4.17 a gallon.
Jim Farley, Fords group vice president of marketing and communications, said yesterday that hes also seen improvement in the past two weeks.
Still, Farley projected that retail sales for the industry will fall 25 to 35 percent in October.
Tight credit made it difficult for some consumers to get financing. Toyota, GM, Honda and other automakers rolled out discount-financing programs in response. Nissan announced its 0 percent campaign today.
Anytime you have an incentive, it helps bring people into the product and into the store, said John Hill, general manager of Sam Swope Honda World in Louisville, Ky.
Analysts predict an industrywide October decline of between 20 and 30 percent. Forecasts by Fords Pipas and Deutsche Banks Lache for an 11 million seasonally adjusted rate would be the lowest since March 1983, according to the Commerce Department. Through last year, U.S. auto sales have averaged 16.8 million this decade.
The gross domestic product shrank at an annual rate of 0.3 percent in the third quarter. The Commerce Department today said U.S. consumer spending was down 0.3percent in September.
We believe the challenges in our markets relate mainly to consumer confidence, not credit availability, said Roger Penske, chairman of Penske Automotive Group, the nations second-largest dealership group.
Penskes company reported last week its third-quarter profit plunged 44 percent from a year earlier.
Mark Fields, Fords president of the Americas, said yesterday that hes not banking on a quick turnaround.
I wouldnt go so far as to say weve hit bottom and the suns going to come out tomorrow, Fields said. I think we have a few other challenges in front of us in the economy over the next couple of quarters.
Amy Wilson, Jamie LaReau, Dave Guilford and Patricia Scott contributed to this report