General Motors' October U.S. sales plunged 45% and Ford's dropped 30%, as low consumer confidence and tight credit combined to scare customers away from showrooms.
The results released Monday — along with a 23% drop at Toyota and a 25% decline at Honda — are strong indications that sales for the industry as a whole may perhaps be the worst in 25 years.
Detroit-based General Motors Corp. said its light trucks sales tumbled 51% compared with the same month last year, while demand for passenger cars fell 34 percent.
The results were less severe at Ford Motor Co., which said its Ford, Lincoln and Mercury car sales were off 27%, while light truck sales for the three brands were down more than 30%.
Overall, GM sold 168,719 vehicles, down from 307,408 in the same month last year, while Ford, including its Volvo brand, sold 132,278 light vehicles last month down from 189,515 in the same month last year.
Mike DiGiovanni, GM's executive director of global market and industry analysis, said the credit crisis and financial market turmoil are affecting the industry to a "frightening" level.
If GM's sales were adjusted for population growth, October would be the worst month of the post-World War II era, he said.
"Clearly we're in a very dire situation," he said.
Despite the steep drop, GM's total was enough to keep it ahead of Toyota Motor Corp. for the No. 1 U.S. sales spot. Toyota sold 152,101 vehicles, down from 197,592 in October 2007. The drop included a 34% decline in light truck demand, while car sales fell 15 percent.
Honda Motor Co. sold 85,864 vehicles as its truck sales fell 29%. But sales of cars from its Acura luxury division rose 6%.
Ford officials said on a conference call with reporters and industry analysts that as bad as October sales were, it's probably not the bottom.
Emily Kolinski Morris, the company's senior economist, said that because automobiles are more durable, people can wait without buying a new vehicle until they feel more confident in the economy.
"The answer to when we will start to come out of that trough lies in when the economy comes out of that trough," Kolinski Morris said.
Poor sales in the last three months are expected to equal dismal third-quarter earnings for the struggling automaker. Ford is scheduled to release its financial results Friday, and the down sales raise the possibility of further plant closures or shift cuts. Ford has said it will continue to reduce production to match consumer demand.
Sales of the company's F-Series pickup trucks, traditionally its top seller, fell 16 percent in October. The company began selling a new version of the pickup last month and has announced plans to add 1,000 workers at its Dearborn Truck Plant in January to handle what it expects will be increased demand.
Some industry analysts are predicting a seasonally adjusted annual sales rate in October of 10.8 million or less, down from 16.1 million a year ago. If the rate drops below 10.83 million, it would be the worst sales month since March 1983, according to Ward's AutoInfoBank. The closely watched figure indicates what sales would be if they remained at their current rate all year, with adjustments for seasonal fluctuations.
After reeling from a 32% drop in September sales, Toyota launched zero-percent financing on almost all of its models prompting analysts to speculate that it could post better-than-average sales as a result.
But, like at Ford, the vast majority of Toyota models still posted double-digit declines. Notable exceptions included sales of the Corolla, which rose 6.1%, and the Sequoia sport utility vehicle, which posted a 21% gain.
Meanwhile, GM's financing arm, GMAC Financial Services, said it was tightening its lending standards to require a credit score of at least 700, potentially shutting out some buyers.
Analysts said GM's employee pricing incentives in September could have pulled in buyers who would have waited to purchase cars, further reducing GM's October sales.
The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 23 sales days last month, two less than in October 2007.