The credit crunch and global recession continues to destroy demand for cars in the US, Europe and Australia for a start.
This week we had confirmation that if anything, the US economy is worse as the car industry is deeper in a black hole at the start of 2009 than it was at the end of 2008, despite huge production cuts, cost cuts and Government aid to General Motors and Chrysler and the finance arms of those two groups.
German car sales, registrations and exports all fell by 14% or more last month, while Australian car sales fell by more than 18% in January.
All this means that for those getting bullish about steel, coal, iron ore and the like, think again.
With construction down, whitegoods depressed and cars in a big mess, there’s no sign of any concerted demand for steel or its raw materials.
Banks have been recapitalised and lending encouraged, but corporate and private buyers remain on the sidelines, despite some astounding discounts and financing bribes to try and get them to buy.
Car sales, especially in the US, are still falling and no amount of aid can arrest the plunge at the moment: and no company is being spared.
The credit crunch and recession continue to wreak havoc on the global car industry, but the real damage is in the US where the credit crunch is intensifying the slump as retail trade and companies cut their purchases.
But not one would have ever thought that the US would fall behind China so quickly, and yet that’s what seems to have happened last month.
US car sales fell 38% in January, worse than expected and even worse than the terrible 36% plunge in December (US sales fell 18% over 2008, with the losses accelerating in the closing five months of the year as demand tanked).
Chinese sales are falling, 2008 sales rose 6.7% on 2007 when they jumped by more than 21%. They were supposed to hit an annual 10 million by the end of last year, but instead 9.5 million were sold.
January sales were forecast to run at an annual rate of more than 10 million units, or more than the US annual rate for last month.
Figures from the US confirm a further slump in car sales last month, with the annual rate put at 9.8 million units, the lowest since 1963, and under China’s expected rate.
This slump has seen Toyota finally become the world’s biggest manufacturer, overtaking General Motors as its sales fell at a slower rate than GM.
Now it seems more cars are being made in China, whether that continues for much longer remains to be seen as China is still slowing as well.
The news from GM for January was terrible: sales down 49%, while Ford saw a 40% plunge (including Volvo). Toyota was down 34%, Honda, 28%. Nissan was off 30%.
But the worst was Chrysler with sales off a huge 55%. No wonder it needs the Government money.(Source)
Slumping sales of cars to US fleets and rental groups helped drive the larger than expected fall.
Not even steep discounts, zero financing and other incentives could persuade private or corporate buyers to boost purchases. GM said fleet sales were down an astounding 80%, Ford’s fell by around 65%.
GM said sales to individuals were off 38%, Ford said its retail sales fell 27% in the month
GM’s said head of global sales and industry analysis, Michael DiGiovanni said “This is the first time in history China has surpassed the US.
GM estimated the industry’s annualised selling rate for cars at 9.8 million in the US in January, down from 10.3 million in December, and less than China’s estimated annualised selling rate of 10.7 million.
It was also less than GM’s reduced annual forecast of 10.5 million units, and under the worst case scenario it used in arguing for aid from the US Government.
GM and Chrysler are working on restructuring plans due by February 17 as conditions of their $US17.4 billion of US government loans.
GM and Ford said much of the slide in sales to sharply lower purchases by fleets.
Car rental companies typically take vehicles on just-in-time delivery, and most US car plants were idle for much of last month on extended holiday shutdowns.
Ford, which is not receiving emergency aid, also said that total car sales in the US slipped below an annual rate of 10 million last month, as did Chrysler.
German brands, Porche and Mercedes-Benz brand both reported a 36% drop in sales. Volkswagen sold 12% fewer cars in the US last month after having a solid 2008. BMW sales fell 18.7% in the month as well.
But back home in Germany the trio is doing it tough: German sales fell 14%, with orders down 13% and registrations off 16.2%.
Exports plunged 39%, according to figures from the industry groups, led by Germany’s Association of International Motor Vehicle Manufacturers (VDIK) and the country’s carmakers’ association (VDA).
In Australia, the December bonus from the Federal Government missed the car industry with sales last month falling a nasty 18.5% after December’s double digit drop.
Figures from the Federated Chamber of Automotive Industries (FCAI) showed the extent of last month’s fall.
The Chamber
