Japanese car makers off 30% in U.S.

Thursday, Dec. 4, 2008


Japanese makers off 30% in U.S.
Bloomberg
Japan's three biggest automakers said their November U.S. sales tumbled more than 30 percent as incentives failed to lure buyers to showrooms in the deepening recession.

Toyota Motor Corp.'s 34 percent plunge was its most since at least 1980, while Honda Motor Co. fell 32 percent and Nissan Motor Co. 42 percent. Combined sales for Asia-based brands, including Hyundai Motor Co. of South Korea, slid 35 percent.



"We've probably reached a point where no vehicle is immune from the ravages of the market," said Mike Robinet, an analyst at CSM Worldwide Inc. of the U.S. "The consumer is not in a very jovial mood when it comes to opening their pocketbooks."

The loss of 1.2 million jobs in the United States so far this year helped drive down November industrywide sales to the lowest annual rate in 26 years. The slump forced General Motors Corp., the largest U.S. carmaker, Ford Motor Co. and Chrysler LLC to seek up to $38 billion in loans from Congress Tuesday.

November's totals pushed the U.S. industry to a 13th straight monthly drop, the longest slide in 17 years. Toyota expects 2008 industrywide sales to be 13.2 million, down from 16.1 million in 2007, said Bob Carter, vice president of U.S. Toyota division sales.

Models including the Honda Fit and Toyota Prius succumbed to the slump after selling for months at or above list prices without incentives. Sales of the Fit subcompact fell 8.4 percent, and the hybrid Prius was off 48 percent.

"This is the worst month for the combined Japanese brands" since 1991, said Jesse Toprak, director of industry analysis for automotive-research firm Edmunds.com of the U.S.

No-interest loan offers will continue on most Toyota models through December, a program that started in October, the company said Tuesday.

That helped boost Toyota's incentives to an average of $1,908 per vehicle, a level Toprak said was the "highest ever" for the automaker.

"At this point, in terms of incentive programs, we've reached a point of diminishing returns," Toprak said. "Consumers are not responding to them right now."

Toyota's U.S. market share was 17.4 percent last month, up from 16.7 percent a year earlier, according to Autodata Corp. of the U.S.

Honda said sales fell 32 percent to 76,233 vehicles, the company's lowest monthly tally since 2000 and biggest percentage drop since 1981.

While Toyota and Nissan have added no-interest loans to spur sales, Honda, which typically spends the least on incentives to maintain resale values, is offering interest rates as low as 1.9 percent. Sage Marie, a spokesman for Honda's U.S. unit, declined to say whether the company planned any additional initiatives to spur sales.

"We're doing what we can to generate interest and traffic in a very challenging market," Marie said. "Showroom traffic is a critical element for sales, and obviously fewer people are coming in right now."

Honda's market share was 10.2 percent, up 0.8 point from a year ago.

Nissan sold 46,605 new vehicles, down 42 percent.

"We initially thought the light at the end of the tunnel would be getting closer as we neared the end of the year, but every sale continues to be a struggle," Jim O'Sullivan, Mazda Motor Corp.'s North American chief executive officer, said in a statement. Sales for the Ford affiliate fell 31 percent.