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December auto sales dive by 36%
Analysts expect the companies will keep record rebates and low-interest financing deals to move 2008 inventory.
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DETROIT - Huge rebates and zero-percent loans couldn't overcome economic uncertainty as U.S. auto sales plunged 36 percent in December, capping a dismal year that saw sales free-fall by 2.9 million vehicles from 2007.
The bleak numbers, according to both industry officials and analysts, mean that record high rebates and low-interest financing deals will stick around until at least February. But those deals will likely disappear as the remaining 2008 models are sold and inventories are lowered to match demand.
One automaker, Hyundai Motor America, is trying to woo skittish buyers by promising to let them return cars for up to a year if they lose their jobs and can't make the payments.
Similar bold moves might be necessary throughout the year.
Every major manufacturer reported drops of more than 30 percent in December. Leading the largest year-over-year drop since the Arab oil embargo days of 1973-74 was struggling Chrysler, which sold 53 percent fewer vehicles than last December and 30 percent fewer in 2008 than in 2007.
General Motors Corp. sold 2.9 million vehicles last year, the lowest number in 49 years.
Outlook is bleak
U.S. auto sales tumbled to 13.2 million in 2008, down 18 percent from 16.1 million in 2007. Consulting firm IHS Global Insight predicts that U.S. sales will drop to 10.3 million this year as the economy continues to sputter.
Automakers were reluctant to predict when a recovery might occur, but most were pessimistic about the first quarter.
Even Toyota Motor Corp. and Honda Motor Co., which earlier in the year had seen increases, saw declines in December that were larger than their U.S.-based competitors'. Toyota was down 37 percent and Honda 35 percent, compared with Ford Motor Company's 32 percent drop and GM's 31 percent slide. Nissan Motor Co. sales also dropped 31 percent.
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