Ford, Toyota post big drops in sales

November 3, 2008 10:05:00 PM PST
Ford's U.S. auto sales plummeted 30 percent and Toyota's dropped 23 percent in October as low consumer confidence and tight credit combined to scare customers away from their showrooms.

Both automakers' results, compared with the same month last year, are strong indications that sales for the industry as a whole may perhaps be the worst in 25 years.

Dearborn-based Ford Motor Co., the first automaker to report its monthly sales Monday, said its Ford, Lincoln and Mercury car sales were off 27 percent, while light truck sales for the three brands were down more than 30 percent.

Overall Ford, including its Volvo brand, sold 132,278 light vehicles last month compared with 189,515 in the same month last year.

Meanwhile, Toyota Motor Corp. sold a total of 152,101 vehicles, down from 197,592 in October 2007. The drop included a 34 percent in light truck demand, while car sales fell 15 percent.

Ford said in a statement that the company faced an "economic gauntlet" last month.

"Challenging external conditions present the best opportunity to challenge the competition," Jim Farley, group vice president of marketing, said in a statement.

Poor sales in the last three months are expected to equal dismal third-quarter earnings for the struggling automaker. Ford is scheduled to release its financial results Friday, and the down sales raise the possibility of further plant closures or shift cuts. Ford has said it will continue to reduce production to match consumer demand.

Sales of the company's F-Series pickup trucks, traditionally its top seller, fell 16 percent in October. The company began selling a new version of the pickup last month and has announced plans to add 1,000 workers at its Dearborn Truck Plant in January to handle what it expects will be increased demand.

Some industry analysts are predicting a seasonally adjusted annual sales rate in October of 10.8 million or less, down from 16.1 million a year ago. If the rate drops below 10.83 million, it would be the worst sales month since March 1983, according to Ward's AutoInfoBank. The closely watched figure indicates what sales would be if they remained at their current rate all year, with adjustments for seasonal fluctuations.

Analysts also said it's possible Toyota will surpass General Motors Corp. as the U.S. sales leader for the first time in history.

After reeling from a 32 percent drop in September sales, Toyota launched zero-percent financing on almost all of its models prompting analysts to speculate that it could post decent sales as a result.

But, like at Ford, the vast majority of Toyota models still posted double-digit declines for the month. Notable exceptions included sales of the Corolla, whose sales rose 6.1 percent and the Sequoia sport utility vehicle, which posted a 21 percent gain.

Meanwhile, GM's financing arm, GMAC Financial Services, said it was tightening its lending standards to require a credit score of at least 700, potentially shutting out some buyers.

Analysts said GM's employee pricing incentives in September could have pulled in buyers who would have waited to purchase cars, further reducing GM's October sales.

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 23 sales days last month, two less than in October 2007.


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