US Auto Sales Drop in 2008, Recovery Unclear

Unsold 2009 Focus sedans sit at a Ford dealership in Denver on Sunday, Jan. 4, 2009. Ford Motor Company said Monday, that sales dropped 32 percent in December. (AP Photo/David Zalubowski)

(AP)

After a year in which U.S. auto sales tumbled 18 percent and GM had its worst year in nearly a half-century amid slack demand fueled by a terrible economic outlook and growing job worries, automakers are reluctant to predict when a recovery might occur.

An even sharper sales decline in December alone means that record high rebates and low-interest financing deals will stick around until at least February. But those deals will likely disappear as the remaining 2008 models are sold and inventories are lowered to match demand.

One automaker, Hyundai Motor America, is trying to woo skittish buyers by promising to let them return cars for up to a year if they lose their jobs and can't make the payments.

Similar bold moves might be necessary throughout the year.

Toyota Motor Corp. said Tuesday that it is suspending production at all 12 of its Japan plants for 11 days over February and March.

The last time Toyota halted production at all its Japan plants was in August 1993, when demand plunged because of a rising yen, and that was for only one day, according to the company.

"We are coping with a slump in global sales," Toyota spokesman Hideaki Homma said Tuesday. "Demand in the world auto market is so depressed that every model is falling sharply in sales."

Toyota last year suspended production at its auto plants in Alabama, Indiana and Texas for three months, and shut down output for two days in December at all its North American vehicle factories including five in the United States, one in Canada and another in Mexico.

Chrysler LLC also shut down its plants for a month in December, longer than the usual two-week break, while General Motors Corp. has said it would shut down a plant in Thailand for up to two months.

On Monday, automakers said U.S. sales fell to 13.2 million in 2008, down 18 percent from 16.1 million in 2007. Consulting firm IHS Global Insight predicts that U.S. sales will drop to 10.3 million this year as the economy continues to sputter.