The Auto Writer

As has been happening all year, auto sales for the month of October 2008 were way off the pace for the same month in 2007, pointing to a historic slide that hasn’t been seen in decades. Every single one of the Big 6 automakers — General Motors, Ford, Chrysler, Toyota, Honda and Nissan — registered drops of 23% or more led by General Motors which saw its sales fall by 45%.

Worse, sales have now dropped for twelve consecutive months, the longest losing streak in seventeen years for the auto industry. Autodata, which tracks monthly U.S. light vehicle retail sales noted that sales for October were just 838,156 units, a decrease of almost 400,000 vehicles over October 2007 or a 31.9% drop. Year to date, 11,601,104 passenger vehicles have been sold, which is nearly two million fewer cars, trucks, minivans, SUVs and crossover vehicles sold through October 2007. Year to date, sales are down by 14.6%.

For October 2008, the Big 6 saw the following decreases:

• General Motors: -45.1%
• Ford: -30.2%
• Chrysler: -34.9%
• Toyota: -23%
• Honda: -25.2%
• Nissan: -33%

The biggest drops were from Porsche (-50.1%), Suzuki (-46.7%) and Jaguar/LandRover (-45.1%). Only Ferrari registered an increase for the month, up 44%, as the automaker sold 108 cars for the month. No major auto manufacturer saw their sales increase for the month although BMW (-4.9%) and Volkswagen (-6.5%) saw the smallest monthly losses.

Bright Spots Among The Carnage

With overall sales numbers being so stark, car manufacturers are looking for some good news among the bad. Fortunately, they don’t have to look too far:

• Daimler AG sales for the year are still up, by 4.7% as the company enjoys the delivery of more than 20,000 Smart ForTwos to consumers, sales which began earlier this year.

• GM sold more than 44,000 of its big pick up trucks in October thanks to big incentives and lower gas prices which brought buyers in.

• Volkswagen is seeing the benefit of having a pair of new diesel models available for sale.  The TDI Sportwagen will likely help to bolster VW sales for the remainder of this year and going forward in 2009.

• BMW is harnessing demand for the MINI Cooper as this model becomes increasingly more important to the company’s bottom line. To date, BMW has sold 10,600 more MINIs than they did for the same period in 2007.

Clearly, there is not much good news among the bad out there, but for automakers who can hold on through this protracted down turn, sales will eventually rebound. However, for those car companies in dire straits, time and money is running out, suggesting that their respective recoveries may only be realized through bankruptcy reorganization.

As I mentioned yesterday, year end sales are already starting with Volkswagen and General Motors actively discounting their vehicles. Expect other manufacturers to quickly follow suit, making this year’s year-end sales events a great time to shop for a new car.