Car sales in the US, Germany and Italy stalled last month, a situation that could put further pressure on embattled manufacturers if it continues, and on beleaguered economies as well.
Government stimulus moves have helped car sales and production recover in the US, Germany, Italy and the rest of Europe, plus Japan over 2009.
That helped pull the respective economies from the crunch.
But in Germany, the car scrappage scheme ended and German production and growth stalled in the final quarter.
The fear is that now, with the impact of cold snowy weather across much of Europe and the US since January, there will be further downward pressure on sales and production and on economic growth.
US car sales stalled in February, thanks to the snow, the safety problems at Toyota and continuing weak personal demand. Strong sales to car rental fleets helped boost output, especially at Ford, which went into the industry’s top spot for the first time since 1998.
To battle a drop in sales, Toyota said that it would attempt to win back consumers with unprecedented discounts including zero-percent financing for five years on top-selling models like the Camry.
General Motors also announced new buyer incentives on leftover 2009 and some new 2010 models as its sales growth dawdled.
Industry-wide sales for February were flat from the depressed sales rate of 2009.
Industry-wide US sales were 10.38 million vehicles, according to industry watcher Autodata.
That’s down from the 10.8 million rate in January.
Sales dropped to 10.4 million units in 2009, the worst performance in 27 years.
The weak auto figures add to emerging concerns that the US economic recovery could stumble in the second half of the year if spending remains lackluster. Consumer spending is considered the key to recovery because it accounts for roughly two-thirds of economic activity.
But analysts blame a combination of the snow storms in the East, parts of the Midwest and South, plus the problems and recalls at Toyota for the slide.
They say they expect sales to rebound in March.
Toyota’s US sales dropped almost 9% in February from an already-low level a year earlier in the depths of the economic crisis.
The decline was led by a drop of nearly 20% for Toyota’s top-selling Camry sedan.
Ford’s US sales rose 43%, with sales to rental companies up 175%.
GM saw sales rise nearly 12%, Chrysler lifted sales 1% (it had been forecast to experience a fall).
GM was forced to recall 1.3 million vehicles yesterday to fix a fault it claimed originated in parts made by a supplier to it and Toyota.
Nissan saw sales rise 29%; Honda 12% and Hyundai Motor 11%. These rises however were less than forecast by industry analysts.
Late yesterday Nissan said it will recall nearly 540,000 vehicles worldwide, most of them in the United States, due to brake pedal defects and faulty fuel gauges.
Nissan said in a statement it plans "to inspect and, if necessary, repair brake pedal pins and fuel-gauge components on certain trucks and minivans."
In Europe, France, Italy and Spain for February car sales reported reasonably solid sales.
German sales fell 30% from a year ago, when sales hit a decade high as the car scrappage scheme kicked in.
France, Italy and Spain have maintained their car scrappage schemes in to 2010, while Germany’s finished late last year and sales have been falling every since.
France will retain its scheme this year, Italy’s ends soon and the Italian industry group forecasts a "Black Spring" with sales down 20% to 30%.
Italian sales fell last month, but even bigger falls are seen once the government support is finished in a few months.
Spain is keeping its program in place; it has no other option, the economy is still in recession and the government doesn’t want more unemployed car workers pushing the jobless rate past 20%.
