Auto sales slump in September
The crisis on Wall Street takes a toll as Toyota and Ford show declines.
The troubled auto industry is taking another hit from the crisis on Wall Street, as early reports of September today showed sales slumping below already weak expectations.
Toyota Motor Corp. said its U.S. sales were down 32.3% from the year-earlier period. Ford Motor Co. said its U.S. sales for the month were down 34.6%, the worst monthly results for both carmakers this year. Since January, Toyota's sales are down 10.4%, while Ford's have fallen 17.6%.
The problem in September, said George Pipas, Ford's top sales analyst, was customers spooked away from dealerships by the congressional debate on a $700-billion financial industry bailout.
"It was tantamount, really, to a natural disaster," Pipas said. Car showroom traffic, he added, was at levels associated with "a large storm or the aftermath of 9/11."
Other carmakers, including General Motors Corp., Chrysler and Honda Motor Co. are expected to release their September sales results later today.
This has been a very difficult year for carmakers, with industry sales down 11.2% across the board through August. With consumer confidence on a continuing slide since late last year, carmakers have been hammered by soaring gas prices in the spring and early summer and, most recently, by extremely restricted access to consumer credit.
Car dealers are complaining that a large portion of customers who do attempt to buy a car today are being turned away because no bank will approve a loan for them. Lenders have greatly tightened their standards in recent months.For example, a salesman at Allen Gwynn Chevrolet in Glendale said that the dealer was forced to turn away a consumer who wanted to buy a Corvette this week, despite his having high credit score.
"We're losing about three customers a day because of lack of credit," said Pogos Yenkanyan, team manager for new car sales at Allen Gwynn. "That adds up to 100 cars a month."
He and other dealers pointed to the rapid demise of leasing -- which has essentially come to a halt for many manufacturers as the credit markets tighten and residual values decline -- as another factor.
Ford for years relied on easy availability of financing and generous lease terms to move the high-end sport utility vehicles such as the Expedition that it specialized in.
September's results highlight how that marketplace has changed. Only one high volume vehicle, the compact Focus, showed a sales increase -- of 4.7% -- for the month. Gas-guzzling models such as the Expedition, Explorer and F-150 pickup were down 37.4%, 67.3% and 41.6% respectively.
Toyota fared little better. Deliveries of its top-selling Corolla and Camry models were down 27.9% and 27%, while its full-sized SUV, the Sequioa, declined 60%. Toyota's continuing downturn, despite the fact that it's a highly profitable company, shows the seriousness of the market's decline.
"In some ways, you're just going to have to tough this out," said Ford's Pipas. "Fundamentally, you're going to have to see the housing market improve and credit markets return to get through this."
ken.bensinger@latimes.com
