Auto Knight

General Motors Has A Lousy Year

by Darren

General Motors is finishing up what can only be described as a lousy year. The company just received over $9 billion in federal bailout funds and they’re expected to post their worst sales numbers since 1992. If GM needed a slogan for 2008 it would be “Ouch.”

Sales dropped 48 percent from a year earlier at Chrysler, 41 percent at GM and 33 percent at Ford Motor Co., based on the average estimates of six analysts surveyed by Bloomberg. Toyota Motor Corp. may report a 40 percent slide and Honda Motor Co. may say its total was down 36 percent, Brian Johnson, a Barclays Capital analyst in New York, said in a Dec. 31 note to investors.

Auto sales tumbled more than 25 percent each month since September as the credit crunch reduced access to loans and consumer confidence fell amid a weakening economy. With demand for large pickup trucks and sport-utility vehicles damped earlier this year by record fuel prices, analysts expect an annual total of slightly more than 13 million autos, the fewest in 16 years.

Analysts are content in blaming consumers for the decline. Consumers are facing a double whammy: they’re facing high unemployment and limited credit. Now that GM and its’ financing arm GMAC have both received massive cash infusions in the last few days, that could change.

Expect huge incentives to get customers to buy

One way to encourage credit worth buyers into purchasing cars will be the use of incentives. There’s already some signs that this approach helped increase sales in the last few days of December.

0% financing for up to 60 months

0% APR for 60 months on the 2008 Chevy TrailBlazer, GMC Envoy, and the entire Saab lineup has already been announced. If that seems like it’s because those are all models that aren’t moving otherwise, you’re right. But right now, no models have been moving.

GM was down 41% in sales in December 2008.