US auto sales slumping in September

Discussion in 'Wall St. News' started by ASusilovic, Sep 17, 2009.

  1. Chrysler and GM CEOs both say sales are weak since the Cash for Clunkers program expired.

    Posted by Charley Blaine on Wednesday, September 16, 2009 3:33 PM

    Chrysler Group said nationwide industry sales are off 19% so far this month after a government purchase-incentive program ended.

    "We are going to see harsh reality in September," Sergio Marchionne, chief executive officer of Fiat (FIATY) and Chrysler, said at the Frankfurt Motor Show in Germany. Adding the falloff from August is a "disaster."

    •Bing: Check the news on auto sales
    General Motors (MTLQQ) CEO Fritz Henderson said the market is "very weak" this month.

    Adding to the worry: Marchionne said Chrysler was in worse shape than he had anticipated.

    Chrysler sales are being pinched beyond the industry decline because of a lack of cars and trucks on dealers’ lots, Peter Fong, Chrysler's lead sales executive, told Bloomberg News.

    Fong, who gave the percentage decline, said Chrysler dealers currently have 83,000 vehicles on hand, about one-quarter of what they had a year ago.

    "It’s the lowest level that anyone can remember," he said. "I think it’s likely that car sales will bounce back next month."

    Chrysler has increased production to replenish lots and should have them restocked later this fall, Fong said.

    Light-vehicle sales in the U.S. last September ran at a seasonally adjusted annualized rate of 12.5 million, which was the lowest since March 1993.

    A 19% decline would equate to a 10.1 million annual rate, higher than any of the first six months of 2009.

    The U.S. government’s Cash for Clunkers incentive to trade in older gas-guzzlers for more efficient new vehicles led to a jump in sales in July to an 11.3 million rate and in August to 14.1 million. The program ended Aug. 24.

    "It was highly stimulative, highly successful in a fairly compact period of time," GM’s Henderson told Bloomberg. "Our assessment was that the payback could be sharp, but short."

    Chrysler expects to reveal in November its plan for integrating Fiat technology and building new products, Marchionne said. Among the decisions is how the Alfa Romeo brand will be sold in the U.S.

    The premium brand would require Chrysler dealers to invest in expanded showrooms and only be available to a limited number of outlets, Marchionne said.

    Marchionne startled reporters today when he said Chrysler's condition is even more dire than first thought.

    "We were surprised by how little had been done in the past 24 months."

    Industry analyst Todd Turner of Car Concepts Automotive Research told CNNMoney that he found it difficult to believe Marchionne's assertion that he didn't know how little work had been going on at Chrysler.

    "I'm a little surprised that he was surprised," he said.

    More likely, Turner said, Marchionne is laying the groundwork for drastic actions that will be announced in November but may have been planned all along.

    "That is that Chrysler is over, basically," he said of Chrysler's flagship car brand. "Within five years, you're going to see nothing."

    Short Fiat ??:D
  2. S2007S


    Sales will decline month over month into early 2010. Consumers are not dumb, they will actually sit out buying a car hoping for more free handouts, as good as these programs are they actually hurt consumer psychology about purchasing future items such as a car or house, hoping for more free monopoly money.