U.S. auto sales dropped 37.1 percent in January, dragged down by the Detroit 3, as the industry posted its lowest monthly total in 27 years.
Ford Motor Co.s 41.6 percent fall and General Motors 49 percent drop were steeper than analysts' forecasts. Chrysler tumbled more than 50 percent for the second straight month. Honda, Nissan and Toyota all slipped more than 27 percent, cementing the industry's fourth straight monthly slide of more than 30 percent.
The annual selling rate of 9.8 million units matched a rate last seen in August 1982. The sales total of 656,881 vehicles was the lowest since December 1981 and marked the 15th-straight monthly decline.
The credit crunch is stifling sales, said John Broderick, general manager of Burlington Automotives Chevrolet store in Burlington, N.J.
Financing is very difficult. Its the toughest Ive ever seen, he said.
Last autumn, GMAC Financial Services effectively stopped consumer lending, requiring credit applicants to have prime credit scores. The GM-exclusive lender loosened restrictions in December, but said today it financed just 5,000 purchases in January. Only one of those deals was from Brodericks store.
GM today responded by initiating a round of incentives that includes 0 percent financing and higher rebates. The program covers some of GMs best-selling vehicles, including the Chevrolet Malibu.