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US auto sales could have been worse, but werenâ€™t in March

03 April 2009 08:07 (UTC +04:00)

Bakuâ€“ APA-Economics. Tight credit and lagging economy significantly hinder Ford, GM and Chrysler sales in March, but it could have been worse.

U.S. automakers posted dismal sales for March, but as gloomy as they were, they met or beat Wall Street’s expectations, lifting shares from their intraday lows. Meanwhile, European carmakers have been successful in convincing drivers to buy new cars, and U.S. rivals are hoping to follow their lead.

Ford Motor said Wednesday its sales fell 40.9% in March, not as deeply as expected, lifting its shares 11 cents, or 4.2%, to close at $2.74 in New York. The sales decline was dragged by a 41.5% drop in demand for the Focus small car, to 12,383 units. Ford Motor’s Lincoln and Mercury brand cars dropped 36.6%, to 46,467 units, in March.

General Motors posted a 45.0% decline in auto sales for March in the U.S. market, in line with expectations. A General Motors bankruptcy is looking "more probable," said the company’s new chief executive, Frederick "Fritz" Henderson, who vowed Tuesday that GM will do "whatever it takes" to meet government restructuring mandates and ensure its long-term success.

GM has 60 days to restructure its debt and its union contracts to meet the government’s viability standard. If it becomes evident that the changes can’t be made by the deadline, GM could go into court sooner, Henderson said.
Shares of GM closed down just one penny, or 0.5%, to $1.93, off their intraday low of $1.58.

In an attempt to boost U.S. car sales over the next two months, the troubled former lending wing of GM, said Wednesday it will make at least $5.0 billion in credit available to consumers through lower vehicle financing costs, and would resume offering loans to subprime borrowers.

In Europe, incentives to get cash-strapped consumers to junk their old cars and buy new ones boosted sales. German officials said more than 860,000 car owners had applied for a 2,500-euro new-for-old "scrappage" bonus. France and Italy saw strong increases in car sales, and the rate of decline eased in Spain to 38.7% in March, following a 48.8% drop in February.

For March, Renault reported an 8.1% increase in overall registrations in France, and a 12.8% increase in sales, boosted by the cash incentive. Peugeot Citroen said its sales were up 12.8%.

Italian new car registrations increased for the first time in a year, rising 0.2%, to 214,218 units in March, transport ministry figures showed on Wednesday. Italy’s Fiat, the country’s biggest car maker, saw car sales rise 6.1%, to 69,882 units, in March. Fiat’s market share of sales rose 32.6% in the month, according to Thomson Reuters, while the group’s orders rose 59.0%, Fiat said. Source: Forbes