Ford posted a 40 per cent drop in January sales in the United States, the company’s sharpest decline in 10 months of double-digit sales declines in the world's largest market for new cars and trucks.
The results from Ford were among the first from major automakers for a month expected to show overall sales near 27-year lows, extending a stretch of 15 months of consecutive cars sales declines.
Chrysler LLC said it expected overall US auto sales for January to drop by as much as 35 per cent after a sharp decline in sales to car rental agencies.
The expected deep decline in sales comes despite more aggressive discounting by all of the automakers, including cut-rate financing, employee pricing and cash-back rebates.
European automakers also reported double-digit sales drops for January: Mercedes-Benz maker Daimler AG and Porsche were down 36 per cent, and Volkswagen AG off 12 per cent.
US auto sales fell 18 per cent in 2008 to about 13.2 million vehicles, battered by a spreading credit crunch, plummeting consumer confidence and a deepening recession.
Sales for 2009 are expected to drop to near 10.5 million vehicles, the lowest level since 1982. But even that comparison understates the depth of the downturn since the US population has increased about a third since the early 1980s.
Ford's sales decline was worse than most analysts had expected. Shares of the firm slipped by two per cent.
S&P said in a note for clients that further such sales declines for Ford could make it hard for the automaker to avoid taking government loans. Ford's rivals General Motors Corp and Chrysler are reorganizing under the terms of a $17.4 billion federal bailout.
Although the US car industry is entering its fourth year of declining sales, the deepening slowdown hit European and Asian markets hard in the final months of 2008.
In Germany, car registrations dropped 14 per cent in January while production tumbled 34 per cent, the German auto industry association VDA said.
Separately, Swedish truckmaker Scania posted a bigger-than-expected fall in fourth quarter earnings and said it would slash its dividend in the face of plunging market demand that saw truck orders fall 98 per cent.
Toyota, the world's largest carmaker, which is due to report third-quarter results on Friday, is expected to miss its target because of falling demand.
Reuters