The folks who were optimistic about the new car market in the U.S. are now eating double-digit declines to the tune of 41 percent, compared to the same period last year. The higher-than-predicted drop represents the worst February for new car sales in a quarter century.
Dwindling consumer confidence thanks to rising unemployment, plunging home prices and gridlocked financial markets were once again the main culprits in the decline. Fleet sales -- generally a sizable amount of new car business during the late winter months -- were also cited by manufacturers as a factor in what has become a free falling industry.
"The economic and competitive environment remains challenging," said Sales and Marketing Vice President Ken Czubay in a statement on the company's February statistics. Speaking to WWJ in Detroit, Ford President for the Americas Mark Fields mirrored the concern, saying car buyers lacked the confidence to buy new cars.
"They're worried about the credit situation, some of them may be worried about the job situation," said Fields. "So it's being reflected in the sales for cars."
Ford sales for February were off 48 percent from February 2008, led by a 71 percent drop in SUV sales.
The 53 percent drop at led the domestic sales decline, raising even more doubts as to whether or not the former juggernaut will survive the storm. 's 44 percent decline gave the privately-owned manufacturer bragging rights for the smallest loss of the domestic manufacturers. In a statement on the company's web site, Chrysler President and Vice Chairman Jim Press clung to any bit good news available, citing a 1.4 percent increase in market share from January as "a shining light of positive news." A stronger in-house financing arm plus aggressive vehicle incentives were also credited with helping Chrysler fail a little bit less than the rest.
The bad news reached overseas as well. sales fell 40 percent, dropped 38 percent, squeaked out with "just" a 37 percent loss and fell hard with a 51 percent decline. German automakers fared slightly better, sales were 34 percent off pace with last year and lost only 19 percent. Subaru once again stole the show by claiming the only positive gain from last February; the company's sales were up a little over one percent. The Group (Hyundai and ) also posted enviable sales figures for the month, with a loss of just under one percent.
Of all the various incentives, rebates and employee pricing programs currently offered by most manufacturers, seems to be the only one having a measurable effect, as indicated in the company's reported February sales figures. In the event of a significant life event such as losing a job, Hyundai's Assurance Program will allow vehicle owners to simply return their vehicles to the dealer without penalty.
Manufacturers will need every type of new vehicle incentive available to entice buyers to part with their cash. Instead of the slight increase most analysts were expecting, February sales figures fell approximately four percent from January, indicating the bottom of the market as yet to be found with no indication of just how far it could go. February's figures represent an annual sales rate of just over 9 million vehicles, the lowest level since 1981 and far below the estimates used by the domestic manufacturers in their restructuring plans.