Troubled GM Still Outsells Toyota

But Automaker Reports 2008 Sales Down 23%, While Japanese Giant Dropped 15.7%

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DETROIT (AdAge.com) -- General Motors Corp. might be troubled, but it still outperformed Toyota Motor Sales USA in 2008. The country's largest automaker sold some 60,000 more new cars and trucks than Toyota in the U.S. despite a supplier strike last spring, negative press about its federal bridge loan and a virtual lending freeze from GMAC in the last quarter.

GM today reported sales of 2.98 million vehicles in 2008, down 23% from 2007. GM said its December sales of 221,983 units slid 31% compared with December 2007, though they were up 43% over November. Toyota, by contrast, reported that its 2008 sales tallied 2.22 million vehicles, a drop of 15.7% from 2007.

GM's Mike DiGiovanni, director of industry analysis, estimated in a sales call today that the auto giant's market share in December rose to 24.2%, or 40% better than November and 22% for the full year, giving it roughly a five-point share lead over Toyota.

Double-digit drops
All of the six major automakers except American Honda Motor Co. reported double-digit percentage drops in their 2008 unit sales compared with 2007. Honda reported a decline in U.S. vehicle sales to 1.43 million, or 8.2% lower than 2007. But in December, Honda said, it sold 86,085 Hondas and Acuras, a decrease of nearly 35% from December 2007.

George Pipas, sales analyst at Ford Motor Co., projected automakers are closing the books on the worst vehicle-sales year since 1992, when the industry sold 13.1 million units. But it was the fourth quarter that really slammed the industry, Mr. Pipas said, as automakers dropped to their lowest number of vehicle sales in the final quarter since 1981, when 2.2 million new vehicles were sold. The car companies collectively sold just 300,000 more vehicles in the fourth quarter of 2008 than they did in the same quarter in 1981.

Mr. Pipas estimated that automakers sold a total of 13.5 million new vehicles in the U.S. last year. The industry had been selling between 16 million and 17 million units annually in recent years.

Jump-starting sales
The carmakers plan to do their part to jump-start sales in January, although none of the marketers revealed how they were going to advertise new deals.

GM will offer attractive-financing-rate programs starting at 2.9%, as well as its traditional consumer-loyalty program in January, after its Red Tag sale deals expire today, Mark LaNeve, VP-vehicle sales, service and marketing in North America, said in the sales call today. He said he hopes GMAC finances between 10% and 15% of GM's new-vehicle loans in January, vs. just 2% to 3% in November and October, when the lender boosted its minimum credit score to 700, he said. GMAC, in which GM owns 49%, had traditionally financed between 40% and 50% of all GM vehicle loans and leases, Mr. LaNeve said.

Chrysler said today it will roll out nationwide a program it tested with an alliance of credit unions in 12 states last month. The program offered a discount of $500 to $1,000 to any credit-union members who bought or leased a new Dodge, Jeep or Chrysler. The automaker said it wants to offer prospects a wide range of financing options, including 0% financing on select '08 models for 72 months and rates as low as 1.9% on certain '09 models. Chrysler also said it is starting the year with discounts of up to $6,000 on 2008 models and up to $3,000 on 2009 models.

Chrysler reported today that its December sales slid 53% to 89,813 units vs. a year ago. Sales for the year are off 30% compared with 2007 to 1.4 million vehicles.

'Volatile year'
"It was a very volatile year," said Ford's Mr. Pipas, who added that he expects at least the first half of 2009 to remain challenging for the industry. But he said he's encouraged that Ford, along with Toyota and Honda, was among the three major automakers to show market-share jumps in each of the last three months of 2008. Ford estimates its market share was 14.6% in December, up 0.7 vs. a year ago. This marks the first time since 1997 Ford has achieved a market-share increase for three consecutive months. Although Ford's full-year share slipped 0.4% to 14.2% vs. 2007, it marked the automaker's smallest decline this decade.

Mr. Pipas said industrywide incentives jumped $600 per vehicle in December to $3,600 from November. Ford's Jim Farley, group VP-marketing and communications, said Ford's December incentives declined, mostly because the automaker had bigger deals in October and November to clear 2008 F-150 pickup models before it launched the redone '09 model last month. He said Ford was one of the only manufacturers with lower incentives in December.

Mr. Pipas said he expects to see "very heavy incentives from the industry in the next three months." Ford reported full-year sales of 1.9 million vehicles, down 20% from 2007. December sales of Ford, Lincoln and Mercury totaled 134,114, off 32% from December 2007.

Rounding out the major six automakers is Nissan North America, which reported a 30.7% drop in December sales to 89,555 vs. December 2007. But for the year, the automaker's sales dropped 10.9% vs. 2007, to 951,350 units.

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