Ford Sales Drop by Almost Half compared to Last year

DETROIT (AP) -- General Motors' U.S. vehicle sales plunged 49 percent in January while Ford's sales dropped 40 percent, starting 2009 at an abysmal pace for the auto whole industry as lower sales to fleet buyers like rental car companies weighed down the U.S. automakers' results.

Japanese rival Toyota's sales dropped 32 percent for the month, and Honda's sales fell 28 percent. Subaru bucked the trend of declines for a second month in a row, posting an 8 percent sales increase, but the industry overall was on track for its fourth straight month in which U.S. sales plunged 30 percent or more.

Other automakers are set to release their sales figures later Tuesday.

Chrysler sales chief Steven Landry said Tuesday that U.S. industry sales could drop as much as 35 percent in January. After meeting with Chrysler dealers at a suburban Detroit hotel, he said the annualized sales rate for the month could drop below 10 million for the first time in more than 26 years.

According to Ward's AutoInfoBank, the last month in which the seasonally adjusted annual sales rate dropped below 10 million was August 1982, when it hit 9.9 million as the nation was mired in a recession.

Domestic and foreign automakers have been struggling as unemployment rises, consumer confidence weakens and many people have a tougher time getting loans. General Motors Corp. and Chrysler LLC have received $13.4 billion in low-interest federal loans to stay afloat, and they hope to get more after they submit a viability plan to the government by Feb. 17. Ford Motor Co. has said it does not plan to use government aid.

GM said earlier this month it is planning its turnaround under the assumption the entire industry will sell 10.5 million new vehicles in the U.S. this year. Chrysler has said it's planning on 11.1 million units, and Ford last week reduced its forecast to a range between 11.5 million and 12.5 million. But few people were expecting the automakers to start 2009 at such a pace.

January is typically a slow sales month, and many automakers and analysts are expecting the market to rebound in the second half of the year as the economy and access to credit improves.

The automakers have rolled out hefty incentive offers in recent months in an effort to boost sales. Edmunds.com estimated the average automaker incentive at $2,714 per vehicle sold in January, down 5.2 percent from December but up 12.5 percent from January 2008.

Jesse Toprak, the auto Web site's executive director of industry analysis, attributed the year-over-year increase to a greater number of lingering 2008 model year vehicles. He noted that 27 percent of all new vehicles sold this January were from the 2008 model year, up from 12 percent a year ago.

Analysts had expected high-volume fleet sales to be down sharply in January, as rental car companies hold onto their current cars longer. The companies have taken a big hit as consumers and businesses cut back on travel budget in the economic downturn, with a spokesman for Hertz Global Holdings Inc. saying rental car demand has fallen by double digits.

Compounding that downturn have been the production cuts across the auto industry that have idled many U.S. factories for several weeks. Many fleet customers get their deliveries right after cars roll off the assembly line, so when factories suspend production, those deliveries come to a halt.

Detroit-based GM sold 128,198 light vehicles in January, while Ford's sales totaled 93,060. Toyota sold 117,287 cars and trucks.

GM said its fleet sales fell 80 percent to just over 13,000 vehicles in January, marking their lowest sales level since 1975. GM's retail sales fell 38 percent.

Dearborn-based Ford said January's drop in sales of Ford, Lincoln and Mercury vehicles included a 27 percent drop in retail sales and a 65 percent decline in fleet sales.

U.S. sales at Ford's Sweden-based Volvo division fell 64 percent to 2,910 vehicles in January, from 8,036 a year earlier. The company is exploring a possible sale of the unit.

Toyota Motor Corp.'s sales of light trucks fell 35 percent on about equal declines in SUV and pickup truck demand, while its car sales dropped 29 percent. Sales of its Prius hybrid slid 29 percent.

Honda Motor Co.'s car sales fell 27 percent and its truck sales dropped 29 percent, but the Japanese automaker saw a 6 percent increase in sales of its Fit subcompact, and sales of the updated Acura TSX sports sedan rose 16 percent.

Ford shares fell 4 cents, or 2.1 percent, to $1.84 in midday trading. GM shares fell 19 cents, or 6.6 percent, to $2.60, and Toyota's U.S. shares rose 90 cents to $64.78.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 26 sales days last month, one more than in January 2008.