By Igor Holas
02.29.2008
Just days before Monday, when automakers will report their US sales for February, Chrysler and Ford released a series of reports preparing the media and Wall Street for declines in their sales. “This year is going to be a pretty severe year,” said Jim Press, Chrysler Vice Chairman on Friday. Ford Sales Analyst George Pipas echoed this sentiment on Wednesday, saying, “I think we can all agree: ’08 is getting off to a pretty low start.”
Overall, Ford predicts a sales decline of about 10% compared to last February, but predicts that its market share will remain stable as other automakers are also expected to post sales declines. This would be a similar situation to last month, when despite 4% decline in sales, the overall industry’s decline of 4.4% ensured that Ford’s share of the market actually slightly increased.
In related news, Ford said on Friday its newly redesigned Ford Focus will actually increase its sales in February. In a release highlighting the sales performance of this model, Ford pointed out that the model is “tracking up” in retail sales, attracting younger buyers, and attracting buyers who choose more options than they tended to in previous Focus models.
Chrysler expects lower overall sales, but stable or even growing retail sales. In this tough month, growth in the retail market would be good news, as low-margin fleet sales erode both profitability and resale values.
Both of the automakers, as well as the industry in general, expect 2008 to end with a decline in overall sales, as US is expected to slide into a recession on the back of the housing and credit troubles. GM and Ford, however, expect early signs of recovery to appear in the latter half of the year. Chrysler and Nissan were not as optimistic, predicting that the weak market would continue at least until the end of this year.
Contrary of the generally gloomy outlook, Honda Motor Co. CEO Takeo Fukui said he saw no signs of recession in the US, and Honda did not expect decline in sales this year. His opinion was unfettered by Honda’s 2.3% sales decline in January, when only General Motors posted sales increase. However, Honda’s 2.3% January decline was not as steep as the overall industry decline.
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No signs of recession? You better lay off of that sake, Honda-san.
I think we’ll see new-vehicle sales in the high 14-million range this year, despite all the whisling past the graveyard. And that, for those that are unaware of past sales volumes, is a huge drop.
Financial bloodbath coming for the auto companies? Possibly. This might be one of the worst yera for auto sales in a long, long time. And the credit requirements for getting a car loan have increased, too.