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GM and Ford Post Double Digit Declines in August

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On: Thu, Sep 2, 2010 at 9:13AM | By: Sherry Christiansen

GM and Ford Post Double Digit Declines in August

Ford Motor Co. reported a 10.7% drop in August U.S. sales to 157,503 cars and trucks after the government's cash-for-clunkers promotion skewed last year’s results. The best-selling F-Series pickup and the Taurus sedan were bright spots, while the Focus and Fusion both reported double-digit declines. General Motors Co.—presently named Motors Liquidation Co.—posted a 25% decline in August sales, ending the automaker's streak of seven straight monthly sales gains.

Sales of Buick, Cadillac, and GMC dropped 11% last month, while Chevrolet shows a 22% decline, according to the automaker’s statement today. While Chevy’s retail sales of full-size pick-up trucks and SUVs rose 8%  last month, sales of many of Chevrolet’s top-selling vehicles such as the Impala, Cobalt, Equinox, Traverse, and Camaro declined drastically from August 2009, according to GM. GM's August sales were down 7.3% when compared to July 2010—when GM posted U.S. light vehicle sales of 199,602. The yearly sales record for GM is even worse at 28.9% lower than August of 2009. Last year the auto industry profited as consumers took advantage of the federal government's “cash for clunkers” program. But GM suffered a 20% sales decline its first month after exiting bankruptcy. Ford Motor Co.'s August sales were reportedly 14% lower than 2009’s August numbers, when the cash for clunkers program helped to boost auto sales. This was the first month Ford has reported a drop in sales since September of 2009.

According to GM’s VP of US sales and operations, “Last year's Cash for Clunkers program spiked industry sales in 2009, so results this August were, not surprisingly, a bit mixed. Importantly, three of our four divisions showed solid gains.”

Industry-wide August deliveries, when adjusted to project an annual rate, came in at around 11.6 million vehicles, according to the Bloomberg News, making August 2010 the 2nd highest of the year.

After the August numbers were in, J.D. Powers and Associates reported that industry-wide August had slowed considerably, particularly in the last week.
“With mixed economic signals and flat incentive levels, there hasn't been enough horsepower behind the recovery to motivate consumers to regain their confidence and purchase vehicles at a higher rate,” said J.D. Power’s executive director, Jeff Schuster. “In addition, it's likely that new-vehicle buyers are holding off on purchases in anticipation of Labor Day incentives, which may benefit September sales.”

Overall, auto retail sells are estimated to have fallen by 7% from last month, according to TrueCar.com.

Many consumers are avoiding a major purchase, such as an automobile, for fear of what is called the “double-dip” recession. Real estate sales have been down by 27%, according to analysts, as unemployment is still 9.5% across the country, nearly a 26 year high of 10.1%.

Ford is planning an overall production of 570,000 automobiles in the last quarter of this year, which is down from last year’s 574,000 vehicles. According to a Ford spokesperson, “The Ford plan is to match capacity with the real demand, and we continue to monitor the key economic indicators as we make adjustments”


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