US Auto Sales Plunge Whopping 36 Percent in Dec.

Ford's sales for 2008 fell 21 percent from a year earlier, keeping the Dearborn automaker in third place in the U.S. auto sales race behind GM and Toyota for the second straight year.

The company sign hangs over an unsold 2009 Escape on display at a Ford dealership in Denver yesterday. Ford Motor Company said Monday that sales dropped 32 percent in December.

(David Zalubowski/AP Photo)
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Jim Lentz, president of Toyota Motor Sales USA, said Toyota is in the midst of the most difficult market it has ever faced, and the situation will be tough until at least the second half of the year. Consumer confidence remains the biggest obstacle, Lentz said.

"We have no illusions about the coming year," he said. "We're in the midst of the most challenging and volatile markets we've ever faced and it may get worse before it gets better."

Chrysler, which received $4 billion in federal loans, attributed its nasty sales drop to the company reducing sales to low-profit fleet buyers such as rental car companies.

Some smaller manufacturers, though, fared better. Subaru of America Inc. said its U.S. sales crept 0.3 percent higher in 2008 on stronger sales of its Forester and Impreza models.

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Auto sales started the year slightly under 2007's pace, but by May, U.S.-based automakers were suffering as gasoline prices started to rise toward $4 per gallon and people shifted from buying pickup trucks and sport utility vehicles to smaller, more efficient cars.

Then, in July, as gas prices neared their peak and the economy started to falter, sales tumbled and never recovered the rest of the year, even though gas subsided to under $2 per gallon.

Lower gas prices have cut into high-mileage gas-electric hybrid vehicles toward the end of the year. Toyota reported sales of the Prius, the top-selling hybrid in the U.S., fell 45 percent last month.

But Lentz was optimistic that hybrid sales would rebound.

"We're going to see fuel prices creep up a bit," he said. "I think the overall greening of America is going to see an increase in hybrid (sales) as well."

GM's December results were boosted by heavy sales incentives, including financing offers announced last week after the Treasury Department said it would give $5 billion in federal aid to the Detroit automaker's ailing financing arm, GMAC LLC.