Ford and GM Sales Plunge
Sales for December for both automakers were down significantly. Ford’s sales were down 13% compared to December of 2005, and for GM’s sales were down by 9.6%.
Ford’s popular F-Series sales had dropped 21 percent versus December 2005, but car sales were 5 percent higher than last year, due to higher gas prices, weaker housing industry and the consumer shift away from SUVs and trucks.
“This year-over-year decline is not a surprise. The drop of approximately 400,000 units is largely attributed to the production cuts that the domestics announced at the beginning of the year,” said Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. “We didn’t expect an increase in sales for the year since the cost of gasoline and other economic trends made many people hesitate before buying a new car in 2006.”
Not sure I buy that line about the decline being due to production cuts. If people wanted to buy those 400,000 units production wouldn’t have been cut. The impact of gasoline prices, the slow down in the housing market, and the slowing economy as a whole though does provide a more reasonable explanation as to why the auto industry has taken such a beating.