September 07, 2008

US auto sales dimmed by soft economy and housing woes

It is reported that US auto sales were stuck in low gear in November as soft economic conditions and worries about a housing maelstrom kept consumers cautious. According to an estimate by research firm Autodata, total light vehicle sales fell by 1.6% YoY in November 2007.

General Motors Corp, the leading US automaker said that domestic new car sales skidded 11% in November, citing soft demand and a reduction in daily rental sales. It added that it sold 263,654 vehicles in the United States, 11% less than in November 2006.

Ford Motor Co saw a modest 0.4% rise in unit new car sales in November after 12 consecutive months of declines, delivering 182,951 new cars and trucks. It said that its sales were also lifted by interest in vehicles equipped with its mobile entertainment and communication system called SYNC, developed by Microsoft.

Chrysler LLC on Monday said that its new car sales in the United States for November dropped 2% from a year ago to 161,088, citing troubles with credit and housing. Mr Darryl Jackson vice president of Chrsyler said that the number three US manufacturer’s performance was encouraging in view of the economy.

Mr David Healy at Burnham Securities citing the credit and housing woes hitting the US economy said that “There are a number of headwinds in the car markets. Auto credit is available but a lot people are stressed with the subprime housing situation and that’s putting a chill on the car market. Higher gasoline prices are a factor as well.”

Analyst Ms Rebecca Lindland at Global Insight said that the sluggish sales picture is unlikely to improve until the economic outlook brightens. She added that “All the automakers will have to see a better economic backdrop. No one is going to be doing well next year. We are looking at a very nervous consumer, a consumer who is not going to be buying a new house or a new car.”