Toyota, Nissan's U.S., Japan Sales Drop on `Collapse' in Demand

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahpahFXiajQc

By Naoko Fujimura and Alan Ohnsman

Nov. 4 (Bloomberg) -- Toyota Motor Corp. and Nissan Motor Co. reported sales in the U.S. and Japan, their two biggest markets, plunged last month, as the credit crunch and drops in the countries' stock markets hammered consumer confidence.

``No one can escape the collapse in demand,'' said Hirofumi Yokoi, a Tokyo-based analyst at auto-consulting company CSM Worldwide. ``The economy is in a severe situation.''

Honda Motor Co., the country's second-largest carmaker, cut its 2008 U.S. sales forecast today, predicting the first annual decline in demand in the country in 15 years. Honda, Nissan, Mazda Motor Corp. and Mitsubishi Motors Corp. have all cut their earnings forecasts in response to plunging car sales.

Toyota's U.S. sales dropped 23 percent last month and Nissan's fell 25 percent, the carmakers said yesterday. In Japan, Toyota sales plunged 14 percent and Nissan's slumped 20 percent.

Toyota gained 4.6 percent to 3,900 yen as of 2:22 p.m. in Tokyo trading. Nissan declined as much as 9.9 percent. Honda Motor Co. was unchanged at 2,400 yen.

The Nikkei 225 Stock Average plummeted 24 percent in October, the biggest monthly decline on record. The Standard & Poor's 500 Index finished October with its worst monthly drop since 1987.



Industrywide Drop

Industrywide sales in the U.S. plunged 32 percent to the lowest monthly total since January 1991, according to Autodata. General Motors Corp., with a 45 percent decline, said that adjusted for population growth, last month was the industry's worst ``in the post-World War II era.''

Sales dropped for a 12th straight month, extending the longest U.S. slide in 17 years. That prompted Toyota to extend a no-interest loan offer it began early last month. Nissan will also offer no-interest loans on five of models, including the Sentra and Versa small cars and the Rouge crossover.

`If you've got Toyota out there with an aggressive 0 percent finance program, a company with its product line, strong brand reputation and healthy finances coming in with a 23 percent decline, you know it's a bad market,'' said Tom Libby, a Troy, Michigan-based analyst at research firm J.D. Power & Associates.

In Japan, sales of cars, trucks and buses, excluding minicars, fell 13 percent to 233,922 vehicles in October, the Tokyo-based Japan Automobile Dealers Association said in a statement today. It was the biggest drop for the month in 10 years and the third straight monthly decline.

Interest Rates

In an attempt to spur growth, the Bank of Japan last week cut interest rates to 0.3 percent from 0.5 percent, and the government said it would pump 5 trillion yen into the economy in its second stimulus package since August.

In response to falling demand, Honda is making additional production cuts in the U.S. Honda will shift North American manufacturing of most V-6 Accord sedans to Lincoln, Alabama, from Marysville, Ohio, in mid-2009 and pare scheduled output of Odyssey minivans and Pilot sport-utility vehicles in Lincoln by an additional 22,000 units, the company said on Oct. 13. Honda will also make more 4-cylinder Accords at Marysville.

Nissan will cut global production by at least 200,000 vehicles this fiscal year. Toyota has cut output of Tundra pickups and Sequoia SUVs in the U.S.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

Last Updated: November 4, 2008 01:46 EST